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Alibaba profits fall as AI costs rise
Chinese company Alibaba announced a 75% decline in its profits during the last quarter of June due to increased spending on artificial intelligence, which led to a 75% rise in its capital expenditures to 67.7 billion yuan ($10 billion). Despite this, the company's revenues increased by 9% to 268.95 billion yuan, slightly beating expectations. The cloud computing division, a key focus of the company's AI initiatives, saw a 45% year-over-year sales increase, with revenues reaching 48.4 billion yuan. The CEO confirmed that revenue from AI products has experienced triple-digit growth for the second consecutive quarter, as the company seeks to capitalize on the rising demand for AI technologies through strategies aimed at boosting growth in this sector.
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