On August 29, Alibaba released its Q1 FY2026 (Q2 2025 calendar year) financial results, revealing that AI+Cloud capital expenditure reached 38.6 billion yuan, setting a historic record. Alibaba has comprehensively delivered on its AI investment commitments and achieved significant results: AI large models achieved "consecutive launches," 8 new data centers were activated, and businesses including Amap and DingTalk underwent comprehensive AI transformation. This intensive investment provides continuous momentum for Alibaba to capitalize on the historic strategic opportunities in AI development.
This quarter's AI+Cloud business demonstrated strong performance, with Alibaba Cloud revenue growth continuing to accelerate to 26%, reaching a three-year high. AI-related product revenue has achieved triple-digit year-over-year growth for eight consecutive quarters.
"Looking ahead, we will continue to invest firmly around our two strategic pillars of mass consumption and AI+Cloud, seizing historic opportunities to achieve long-term growth," said Daniel Zhang, CEO of Alibaba Group.
**AI Large Models Achieve "Consecutive Launches," Model Capabilities Continue to Improve**
Targeting AGI, Alibaba continues to pursue the upper limits of AI model intelligence capabilities and broad industry applications. This quarter, with continued investment in AI infrastructure and AI product development, Alibaba once again refreshed the update speed of AI large models.
Recently, Tongyi AI large models achieved "consecutive launches," successively open-sourcing new versions including the Qwen3 non-reasoning foundation model, reasoning model, AI programming model Qwen3-Coder, and video generation model Wan2.2, respectively winning global open-source championships in mainstream areas including foundation models, programming models, and reasoning models.
In early August, Alibaba open-sourced its new text-to-image model Qwen-Image, which topped the Hugging Face model leaderboard on the same day. On August 22, Alibaba also released the Agentic programming platform Qoder, which, based on powerful programming agents, can achieve autonomous AI development and significantly improve real software development efficiency.
Recently, SAP reached a strategic cooperation with Alibaba in cloud and AI fields. As SAP's global cloud computing partner, Alibaba Cloud will support SAP customers in deploying SAP core software systems on Alibaba Cloud, and SAP will also collaborate with the Tongyi Qianwen model to provide AI upgrades for enterprise customers.
**8 New Data Centers Activated, Continuing to Build Full-Stack AI Technology Company**
In February this year, Alibaba announced a 380 billion yuan investment over the next three years to build cloud and AI hardware infrastructure. Alibaba is comprehensively delivering on its AI investment commitments and is becoming a full-stack AI technology company with capabilities spanning AI computing power, AI cloud platforms, AI models, open-source ecosystems, and AI applications.
Since the beginning of this year, Alibaba Cloud has invested in and activated 8 new AI and cloud data centers and availability zones globally, including Beijing, Shanghai, Hangzhou, as well as Thailand, South Korea, Malaysia, Dubai, and Mexico, to meet domestic and overseas cloud computing and AI demands. In the second half of this year, Alibaba Cloud's global infrastructure footprint will expand to 30 regions and 95 availability zones.
International market research firm Omdia released its latest generative AI report, rating Alibaba Cloud as a "Leader" in the AI cloud market, making it the only selected Chinese technology company. The report emphasizes that Alibaba Cloud possesses full-stack generative AI solutions, comprehensive and developer-friendly AI platforms, and open-source initiatives.
**Amap, DingTalk and Other Internet Platform Businesses Accelerate AI Application Development**
In AI products and applications, Alibaba has rich scenarios for both consumer and business applications, with multiple internet platform businesses undergoing AI upgrades to create new user and industry value.
In August, Amap announced comprehensive AI transformation, launching the world's first map-based AI-native application—Amap 2025, which democratizes spatial intelligence in rapidly changing real-world scenarios and has the opportunity to become an important new gateway for future lifestyle services through AI upgrades.
Recently, DingTalk completed its latest AI upgrade, launching the next-generation AI office application format "DingTalk ONE," creating the world's first Agent-driven work information stream and exploring next-generation work application formats.
The e-commerce AI tool "Site-wide Promotion" continues to drive efficiency improvements for Taobao merchants' operations and has gained widespread merchant recognition. Financial results show that the penetration rate of "Site-wide Promotion" among merchants has continued to increase for multiple consecutive quarters. In June, Taobao launched the billion-parameter large model RecGPT, making "Guess What You Like" more accurate, with tests showing user add-to-cart actions and dwell time both increased by over 5%. Financial results indicate that more Alibaba.com merchants are adopting AI-driven tools for marketing, procurement, and product listing, expanding the platform's revenue channels.
In the AI-to-consumer field, Alibaba is extending from software to multi-format hardware. On July 26, Alibaba announced the latest progress on its first self-developed AI glasses—Quark AI glasses, which have completed technical development and will be officially released within the year.
Comments