Alibaba has presented its first-quarter results with a bittersweet surprise. The Chinese giant reported an 84% drop in adjusted profit (EBITA), which stood at 5.1 billion yuan. The reason for this collapse is not a disaster, but a bet: massive investments in technology and e-commerce. Meanwhile, its cloud computing division grew 38%, driven by demand for artificial intelligence.
Alibaba's cloud and the push of artificial intelligence ☁️
Alibaba's cloud computing division has been the beacon in the financial storm. With 38% revenue growth, the business directly benefits from the rise of artificial intelligence. Chinese companies are adopting AI models that require computing power, and Alibaba offers infrastructure to train and run these systems. The company competes directly with Tencent and Huawei in this segment, where demand for servers and storage continues to rise. It's not a miracle; it's a strategy.
Losing money to buy servers, the master plan 🔥
Alibaba has discovered the magic formula: it spends so much on AI and cloud that its profit plummets 84%, but then boasts that the cloud grows 38%. It's like a chef burning down the kitchen to prove he knows how to make fire. Investors look at the income statement and see smoke, but they also see a bright future full of servers. Meanwhile, shareholders pray that artificial intelligence will soon learn to generate real money.