Alibaba Group reported earnings for the quarter ending December 31 on Thursday. Shortly afterward, Alibaba Group’s CEO, Eddie Wu, addressed investors and analysts on an earnings call. He mentioned “AI” more than 20 times and also revealed Alibaba will soon release a deep reasoning model built on Qwen2.5-Max.
Over the past year, we have pursued our “user-first, AI-driven” strategy and focused on our two core businesses of e-commerce and AI + Cloud. After a year of transformation, our core businesses have demonstrated accelerating growth momentum. We have also largely completed the divestments of our offline assets. Across Alibaba Group, our businesses now possess strong business fundamentals and profit-generating capabilities.
This quarter, we continued to pursue our integrated “AI + Cloud” strategy in our cloud business. Leveraging our industry-leading AI product portfolio, overall revenue excluding Alibaba-consolidated subsidiaries grew 11% year-over-year this quarter, with AI-related product revenue maintaining triple-digit year-over-year growth for the sixth consecutive quarter. With the rapid adoption of AI technology across industries, customer demand for Alibaba Cloud products has surged. Looking ahead, revenue growth of Cloud Intelligence Group will continue to accelerate.
We recently launched Qwen2.5-Max, our flagship AI foundation model, which has achieved industry-leading performance across multiple recognized benchmarks. As of the end of January, over 90,000 Qwen-based derivative models have been developed globally, making Qwen the most popular among developers across the major model families. Over 290,000 companies and developers have accessed Qwen APIs through Alibaba Cloud’s Bailian platform. We will soon release a deep reasoning model built on Qwen2.5-Max.
In e-commerce, Taobao and Tmall continued to invest in new user growth and comprehensive user experience enhancements. We saw strong growth in both new consumers and orders during the quarter. 88VIP members, our core consumer group, maintained double-digit growth, reaching 49 million by the end of the quarter. Taobao and Tmall also made solid progress in monetization as planned, with CMR growing 9% year-over-year. At the same time, Taobao and Tmall continued to strengthen merchant-friendly measures that improve our platform’s business operating environment, fostering higher-quality and more sustainable development.
Our international e-commerce business maintained strong growth this quarter, driven by cross-border businesses, with continued improvement in operating efficiency. During the quarter, we increased investment in key markets while focusing on operating efficiency, with Choice’s unit economics improving on a sequential basis. We expect AIDC to achieve its first quarter of profitability in the next fiscal year.
Our other internet platform businesses continued to improve operating efficiency. Amap achieved profitability this quarter.
Looking ahead, Alibaba’s strategic direction and roadmap are clearer than ever. We will continue to focus on three business categories: domestic and international e-commerce, AI + cloud computing, and internet platform businesses. We are confident that our focused strategy will drive sustained solid growth for Alibaba Group.
Today, AI technology advancements are driving profound industry transformation. In alignment with Alibaba Group’s business landscape, we will scale up investments in the following three areas as part of our broader AI strategy over the next three years:
- Infrastructure for AI and cloud computing:The AI era presents a clear and massive demand for infrastructure. We will aggressively invest in AI infrastructure. Our planned investment in cloud and AI infrastructure over the next three years is set to exceed what we have spent over the past decade.
- AI foundation models and AI-native applications:AI foundation models are pivotal to transforming industry productivity. We will substantially increase R&D investment in AI foundation models to maintain our technological leadership and drive the development of AI-native applications.
- Transforming our existing businesseswith AI: AI technology presents powerful opportunities to enhance user value across our e-commerce and other internet platform businesses. We will increase investment in AI application R&D and computing power, and deeply integrate AI across our businesses, capturing new growth opportunities in the AI era.
Looking ahead, we are confident in our focused strategy on e-commerce and “AI + Cloud” and excited by the business opportunities being unlocked by this new technology cycle.
