Alibaba aims for US$100b annual revenue from cloud, AI business despite missing estimates
T-Head, mentioned for the first time in the company’s earnings, has shipped more than 470,000 AI chips as of February
Alibaba Group Holding on Thursday said it aimed to generate US$100 billion in annual external revenue from its combined cloud and AI businesses within five years after disclosing for the first time the production progress of its T-Head chip unit, even as it missed its quarterly earnings estimates.
“Over the past three months, token consumption on the Model Studio platform has grown by six times,” said CEO Eddie Wu Yongming on the earnings call, adding that model-as-a-service offerings would become the cloud division’s largest growth driver.
China’s e-commerce and artificial intelligence powerhouse reported a 2 per cent year-on-year increase in revenue to 284.8 billion yuan (US$40.7 billion) for the December quarter, but missed the 289.8 billion yuan consensus forecast compiled by Bloomberg.
The company said it “brought its proprietary GPU [graphics processing unit] into production at scale”. T-Head, mentioned for the first time in Alibaba’s earnings, had shipped more than 470,000 AI chips as of February and was nearing 10 billion yuan in annual revenue over the past two years, the company said.
“This quarter, Alibaba maintained strong investments across our core pillars of AI and consumption,” said Wu, adding that “AI is and will continue to be one of our primary growth engines”.
The results come as the group’s core e-commerce business remains constrained by weak consumer spending amid macro headwinds, while its cloud and AI operations continue to gain traction but weigh on near-term profitability.