Alibaba’s Cloud Intelligence Group posted income of $4.66 billion in fiscal Q1, in contrast with $4.15 billion in the identical quarter final 12 months
In sum – what to know:
Cloud income surged 26% – Alibaba Cloud posted $4.66B in Q1 2026, outpacing the corporate’s general 2% progress, with AI-related income sustaining triple-digit growth.
$53B capex dedication – Alibaba spent $5.4B final quarter on cloud and AI, regardless of provide chain dangers tied to chip restrictions, and plans $53B over three years.
SAP partnership expands – A brand new deal positions Alibaba Cloud as SAP’s world associate, deploying Qwen AI fashions to assist enterprise AI transformation companies worldwide.
Alibaba Group’s cloud computing arm reported a 26% year-on-year income improve in its newest quarterly outcomes, underscoring the unit’s position because the Chinese language firm’s primary progress driver.
In its Q1 2026 earnings, Alibaba’s Cloud Intelligence Group posted income of $4.66 billion, in contrast with $4.15 billion in the identical quarter final 12 months. The division highlighted that AI-related revenues maintained triple-digit progress for the eighth consecutive quarter, now accounting for greater than 20% of exterior buyer income.
Alibaba’s chairman, Eddie Wu, stated this momentum displays sturdy enterprise adoption of Alibaba’s AI fashions, together with Qwen. Amongst key wins this quarter was a partnership with SAP, beneath which Alibaba Cloud will function SAP’s world cloud computing associate. SAP will use Alibaba’s Qwen fashions to ship AI transformation companies to enterprises.
The earnings confirmed the sharp distinction between the cloud unit’s efficiency and that of Alibaba’s broader enterprise. Alibaba income rose solely 2% year-on-year in fiscal Q1, to $34.57 billion.
Alibaba has additionally been accelerating infrastructure funding. The corporate reaffirmed its plan to spend $53 billion on cloud and AI over the subsequent three years, with round $5.4 billion deployed up to now quarter alone. Wu famous, nevertheless, that AI chip provide chain restrictions might create fluctuations in capex spending, although Alibaba is working with a number of companions to mitigate dangers.
Trade comparisons put Alibaba’s cloud progress on par with US hyperscalers: Google Cloud reported 32% progress in its final quarter, Microsoft 26%, and AWS 17.5%.
Past China, Alibaba Cloud continues to increase internationally, opening new information facilities in Malaysia and South Korea.
Alibaba Group has developed a brand new synthetic intelligence chip designed to deal with a wider vary of inference duties, in line with a latest Wall Avenue Journal report.
The chip, presently present process testing, is being manufactured in China, a shift from an earlier technology of Alibaba’s AI processors that have been fabricated by Taiwan Semiconductor Manufacturing Firm (TSMC), in line with the report.
The event comes amid efforts by Chinese language know-how corporations to cut back reliance on overseas AI chip suppliers.
Chinese language authorities have discouraged home corporations from deploying the Nvidia H20 chip, notably in authorities and security-related tasks. Chinese language authorities additionally reportedly instructed massive corporations comparable to Alibaba, ByteDance and Tencent to pause H20 purchases whereas a nationwide safety overview is underway.
China is requiring its information facilities to undertake extra domestically produced chips, underscoring Beijing’s intention to cut back dependence on overseas semiconductors, in line with a report by the South China Morning Put up.
State-owned computing hubs in China have been instructed to make sure that over half of their chips come from home producers.
