Alibaba Group closed fiscal year 2026 with cloud revenue surging and its AI bets delivering across the business. Revenue for the March quarter and full fiscal year each grew 11% year-over-year on a like-for-like basis, while Cloud Intelligence Group’s external revenue climbed 40% as enterprise adoption of AI services deepened.
“Alibaba’s full-stack AI investments have progressed from incubation to commercialization at scale. This quarter, we achieved accelerated breakthroughs across models, cloud infrastructure, and applications,” said Eddie Wu, Chief Executive Officer of Alibaba Group. “Our Qwen LLM demonstrated leadership in reasoning and coding while we strengthened our multimodal model portfolio with the launch of video generation and world models. As we see massive potential for agentic AI, we launched multiple enterprise AI agents for office and coding use cases, and we fully integrated e-commerce capabilities into the consumer-facing Qwen app, deepening synergies between AI and our consumer ecosystem.”
"Alibaba’s full-stack AI investments have progressed from incubation to commercialization at scale."
– Eddie Wu CEO of Alibaba Group
Cloud Intelligence Group was the quarter’s standout performer, with revenue climbing to RMB41,626 million (US$6,035 million). External revenue growth accelerated even faster, to 40%, fueled by public cloud expansion and increasing enterprise adoption of AI-related products.
AI-related product revenue delivered triple-digit year-over-year growth for the eleventh consecutive quarter and accounted for 30% of Cloud’s external revenue. Annualized AI-related product revenue surpassed RMB 35.8 billion (approximately US$ 5.2 billion).
To sharpen its focus on Model-as-a-Service (MaaS), Alibaba established the Alibaba Token Hub (ATH) Business Group in March, led by CEO Eddie Wu. This quarter, Alibaba launched a diverse portfolio of MaaS offerings tailored to developers and larger enterprises as demand for AI models surged. As a result, the customer base for Model Studio, Alibaba’s one-stop model service platform, grew eightfold year-over-year.
Alibaba expects AI model and application services annualized recurring revenue (ARR), including the Model Studio platform, to surpass RMB 10 billion (approximately US$1.4 billion) in the June quarter and RMB 30 billion (approximately US$4.3 billion) by year-end. Within approximately one year, AI-related product revenue is forecast to cross 50% of Cloud Intelligence Group’s total external revenue, making it the division’s primary growth engine.
"Alibaba expects AI model and application services annualized recurring revenue (ARR), including the Model Studio platform, to surpass RMB 10 billion (approximately US$1.4 billion) in the June quarter and RMB 30 billion (approximately US$4.3 billion) by year-end. Within approximately one year, AI-related product revenue is forecast to cross 50% of Cloud Intelligence Group’s total external revenue, making it the division’s primary growth engine."
The company is well on track to reach the goal of over US$100 billion in combined cloud and AI external revenue over the next five years, with MaaS becoming the largest revenue product.
At the model layer, Alibaba introduced Qwen3.6-Plus in March, delivering significant performance gains in coding and agentic programming. Beyond the Qwen family, its next-generation AI-native portfolio, including the world model HappyOyster and the multimodal model HappyHorse, is gaining market traction in a phased rollout.
Alibaba’s chip design subsidiary, T-Head Semiconductor, has scaled production of its proprietary GPU chips, giving Alibaba a cost and performance edge in the agentic AI era. Over 100,000 Zhenwu PPUs are now deployed on Alibaba Cloud’s public cloud platform, supporting more than 30 leading automakers and autonomous driving companies.
More than 60% of T-Head’s compute capacity now serves external customers. With capability of delivering self-developed AI chips at scale, Wu said this gives Alibaba structural independence over its AI compute supply chain.
The enterprise AI agent Wukong is now in scaled deployment, helping businesses embed agentic capabilities directly into workflows to drive operational outcomes. In a recent report, Morgan Stanley identified Alibaba as a key overweight pick for its full AI stack exposure.
On the consumer side, the Qwen App struck its first external partnership with China Eastern Airlines, allowing users to handle complex travel tasks through natural language. Alibaba then deepened the Qwen app’s reach with full integration with the Taobao ecosystem, transforming the shopping journey from keyword search to conversation.
Total revenue for Alibaba China E-commerce Group grew 6% year-over-year to RMB122,220 million (US$17,718 million) during the March quarter. Customer management revenue grew 8% year-over-year on a like-for-like basis.
Quick commerce further improved unit economics, and increased average order value quarter-over-quarter primarily driven by order mix optimization. The gains were achieved while overall market share held stable.
The number of 88VIP members, Alibaba’s highest-spending consumer cohort, surpassed 62 million, continuing a double-digit growth trend.
The board approved an annual regular cash dividend of approximately US$0.13 per ordinary share, or US$1.05 per ADS, with an aggregate payout of approximately US$2.5 billion.
“Alibaba is at a pivotal juncture where our technology investments are beginning to pay off commercially. We will maintain our strategic resolve and leverage our full-stack AI capabilities to support long-term growth,” Wu said on the analyst call.
This article was originally published on Alizila written by Alizila Staff.
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