AliViews: Eddie Wu on Alibaba's Q4 Earnings

Alibaba Group on Wednesday reported earnings for the quarter ending March 31 2026. Shortly afterward, Alibaba Group’s CEO Eddie Wu addressed investors and analysts on an earnings call.

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Alibaba Group on Wednesday reported earnings for the quarter ending March 31 2026. Shortly afterward, Alibaba Group’s CEO Eddie Wu addressed investors and analysts on an earnings call.

Over the past quarter, Alibaba’s high-intensity investment in our two strategic priorities of AI + Cloud and consumption is rapidly translating into tangible business results, with Group revenue growing 11% year-over-year.

This quarter, Cloud Intelligence Group’s external revenue growth accelerated to 40%, and AI-related product revenue achieved triple-digit growth for the eleventh consecutive quarter. China e-commerce CMR grew 8% year-over-year on a like-for-like basis, and the quick commerce business achieved significant unit economics improvement while maintaining market share.

We are at a pivotal inflection point in the evolution from conversational chatbots to autonomous AI agents, which is directly driving explosive growth across three core workload categories: training, inference, and agent orchestration.

Against this backdrop, Alibaba’s AI has moved beyond the initial investment phase and progressed commercialization at scale.

"Alibaba’s AI has moved beyond the initial investment phase and progressed commercialization at scale."
– Eddie Wu CEO of Alibaba Group

Let me now walk you through four areas in detail: AI commercialization, cloud infrastructure, the AI application ecosystem, and our consumption businesses.

1. The AI and cloud commercialization inflection point has arrived.

This quarter, Cloud Intelligence Group’s annualized AI-related product revenue has surpassed RMB 35.8 billion, continuing to maintain triple-digit growth. AI-related product revenue now accounts for 30% of Cloud Intelligence Group’s external revenue. We expect that in about one year, AI-related product revenue will cross the 50% threshold, becoming the primary engine driving the cloud business’s revenue growth. As a result, Cloud Intelligence Group’s external revenue growth is expected to continue accelerating beyond its current 40% rate over the coming quarters. Given the certainty of long-term AI demand and our full stack technology advantages, we expect this trajectory to sustain strong growth over the medium to long term.

"AI-related product revenue now accounts for 30% of Cloud Intelligence Group’s external revenue. We expect that in about one year, AI-related product revenue will cross the 50% threshold, becoming the primary engine driving the cloud business’s revenue growth."
– Eddie Wu CEO of Alibaba Group

This reflects AI’s role in driving a comprehensive upgrade of Alibaba Cloud’s entire business, as its growth engine fully pivots from traditional compute and storage to models, AI compute, and agent services.

We are also seeing exponential growth in AI model and application services revenue, a new revenue engine dr iven jointly by foundation model services and AI-native software.

Over the past three months, token consumption volumes on our model services platform grew substantially quarter-over-quarter, as enterprise customers accelerated their shift from simple tasks to production-scale and complex workloads, driving continued growth in demand for model and application services on the Model Studio platform.

We expect model and application services annualized recurring revenue (ARR), inclusive of the Model Studio platform, to surpass RMB 10 billion in the June quarter and RMB 30 billion by year-end. The high-margin profile of this revenue stream is becoming increasingly apparent, making it a source of healthy, high-quality growth.

"We expect model and application services annualized recurring revenue (ARR), inclusive of the Model Studio platform, to surpass RMB 10 billion in the June quarter and RMB 30 billion by year-end."
– Eddie Wu CEO of Alibaba Group

2. Our AI infrastructure underpins our full technology stack and constitutes a durable moat.

T-Head’s proprietary GPU chips have achieved scaled mass production, with over 60% of compute capacity already serving external customers across Internet, financial services, and autonomous driving verticals. As the only AI cloud provider in China capable of delivering self-developed AI chips at scale, we have secured autonomy over our compute supply chain while providing customers with highly competitive AI inference and training services. In an environment of compute scarcity, this structural advantage is favorable to our revenue growth and gross margin improvement.

At the same time, our cloud products are accelerating their AI-oriented upgrade. The surge in agent workloads has significantly elevated demand for traditional cloud products built around CPU, storage, and containers, and we are upgrading these into infrastructure solutions optimized for the agent era.

3. At the application layer, we have built a complete closed loop spanning AI-native software to a full agent ecosystem.

Alibaba Token Hub (ATH) continues to launch new products, connecting consumer and enterprise environments, with breakthrough progress in AI-native software and coding agents.

The Qwen model continues to iterate across reasoning, coding, and agentic capabilities.

On the enterprise side, we have launched a range of products spanning intelligent workplace tools, AI coding, and business operations management, helping enterprises unlock greater productivity.

On the consumer side, Qwen App has fully integrated Taobao and Tmall’s commerce service capabilities. With this, Qwen App is now deeply embedded across the Alibaba ecosystem, spanning Taobao, Alipay, Amap, and Fliggy, making it China’s first all-in-one personal assistant to seamlessly bridge everyday life, productivity, and learning.

4. Across our consumption businesses and at the group level, we are prioritizing long-term value.

Beyond AI, our consumption strategy continues to progress steadily, with CMR growth rebounding significantly. This quarter, CMR grew 8% year-over-year on a like-for-like basis, as we continue to improve user experience and merchant operating efficiency. The quick commerce business achieved significant unit economics improvement while maintaining stable market scale.

In summary, the return on our investments in AI+ Cloud and consumption are increasingly clear: AI + Cloud revenue growth is accelerating with improving margins, model and application services ARR continues to grow at pace, and operating efficiency across our consumption business continues to improve.

Facing the historical opportunity that AI represents, 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.

This article was originally published on Alizila written by Alizila Staff.

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AliViews: Eddie Wu on Alibaba's Q4 Earnings

1. The AI and cloud commercialization inflection point has arrived.

2. Our AI infrastructure underpins our full technology stack and constitutes a durable moat.

3. At the application layer, we have built a complete closed loop spanning AI-native software to a full agent ecosystem.

4. Across our consumption businesses and at the group level, we are prioritizing long-term value.

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