Alibaba Group Targets $100 Billion in AI and Cloud Revenue Amid E-Commerce Slowdown
Alibaba Group has unveiled an ambitious plan to double its revenue from cloud computing and artificial intelligence to reach $100 billion annually within five years, as it seeks to offset slowing growth in its core e-commerce business.
The announcement comes after the company reported a sharp 67% decline in quarterly profits and modest revenue growth, intensifying pressure on management to deliver returns from its massive AI investments, which have exceeded $53 billion in recent years.
As part of its new strategy, Alibaba launched a new enterprise-focused AI service called “Wukong” and raised prices for cloud computing and storage services by up to 34%, aiming to boost monetization in its rapidly growing AI segment. The company noted that AI-related revenues have posted triple-digit growth over ten consecutive quarters.
CEO Eddie Wu emphasized that the company’s AI ambitions are clear, targeting an annual growth rate of no less than 35% in the segment—roughly in line with the performance of its cloud division in the final quarter of 2025.
Subhead: Mounting Challenges Across Core Businesses
Despite these efforts, Alibaba continues to face headwinds in its broader operations. Quarterly revenue rose just 2% to $41.3 billion, while net income declined significantly due to heavy spending on promotional campaigns to counter intensifying competition in the e-commerce sector.
In a bid to streamline its AI operations, the company consolidated most of its AI units under a unified platform called “Alibaba Token Hub,” aimed at improving pricing strategies and marketing efficiency amid growing demand for agent-based AI solutions.
Alibaba is also contending with fierce competition in China from rivals such as Tencent Holdings, DeepSeek, Moonshot AI, and MiniMax, many of which offer low-cost and open-source AI solutions—adding pressure on Alibaba to enhance profitability while leveraging its infrastructure and data advantages.
Further challenges emerged within its R&D division following the departure of Jonyang Lin, a key developer behind the “Qwen” models, raising concerns about the company’s ability to sustain innovation.
Nevertheless, Alibaba continues to invest in integrated AI solutions spanning both hardware and software, while strengthening its semiconductor arm “T-Head” to attract customers and investors.
Through this strategy, Alibaba aims to transform its substantial AI investments into a primary revenue driver, while navigating competitive pressures, rising costs, and the need to ensure long-term profitability.