Alibaba Cloud returns to growth

Alibaba Cloud focuses on the strategic direction of "AI-driven, public cloud first" and has shown positive growth momentum in this fiscal quarter.

On the evening of August 15th, Alibaba Group released the performance for the first quarter of the 2025 fiscal year. Boosted by AI, Alibaba Cloud, which exceeded expectations in both revenue and profit growth, became the most eye-catching sector within the entire Alibaba Group.

The financial report shows that Alibaba Cloud's business returned to growth in the first quarter, with external revenue (excluding cloud revenue from Alibaba's related companies) increasing by 6% year-on-year, while public cloud business achieved double-digit growth.

With the growth of Alibaba Cloud's profit, adjusted EBITA profit increased by 155% year-on-year, reaching 2.337 billion yuan in a single quarter. In comparison, this number was only 916 million yuan in the same period last year.

The report points out that this growth is mainly due to a focus on the public cloud strategy and improved operational efficiency. This is attributed to Alibaba Cloud's continuous enhancement of open-source large model capabilities, as well as the "price war" driven by AI model APIs and cloud services, further promoting enterprise cloud adoption.

With cloud + AI technology and product capabilities, Alibaba Cloud has supported the large-scale model applications of many tech companies such as Moyu Anmian and ZhiLian Recruitment. It can be said that in the later stage of the "Battle of Large Models," Alibaba Cloud has already reaped the initial dividends.

Behind this success is Alibaba Cloud's continuous efforts to lower the barriers to AI and cloud usage.

During the quarter, Alibaba Cloud released the open-source model Qwen2-72B. Currently, the download volume of the Tongyi Qianwen open-source model has exceeded 20 million. At the same time, Alibaba Cloud significantly reduced the prices of 9 main large models of Tongyi Qianwen. Among them, the API input price of the GPT-4 level main model Qwen-Long has been lowered to 1 yuan for 2 million tokens.

This aggressive price reduction directly stimulated the usage of Alibaba Cloud's AI products.

The financial report revealed that the number of paid users on Alibaba Cloud's AI platform BaiLian has grown by over 200% compared to the previous quarter. BaiLian platform integrates hundreds of large model APIs, supporting enterprises to launch general or industry-specific models.

While driving AI adoption, Alibaba Cloud's influence has also increased, enlarging the role of "cloud infrastructure." In the recently concluded Paris Olympics, Alibaba Cloud, as the exclusive cloud service provider for the Olympic Committee, supported 2/3 of the broadcast signal distribution; Alibaba Cloud's AI technology was also widely used for the first time in the Paris Olympics.

However, Alibaba Cloud also admitted that these continued investments in customers and technology have consumed some of the profit growth. Nevertheless, the financial report emphasized that Alibaba Cloud will continue to invest, especially in building AI technology and infrastructure, to drive the adoption of AI applications in cloud computing and maintain Alibaba Cloud's market leadership.

During the financial report meeting, Alibaba Cloud CEO Eddie Wu also stated that they will continue to optimize the cloud product structure, focusing on competitive, sustainable gross margin, and replicable revenue public cloud products. This is the foundation for Alibaba Cloud's healthy and high-quality growth At the same time, strengthening the synergies of cloud products in the AI era is essential. We need to help existing customers implement new AI requirements on Alibaba Cloud, as well as enable AI-native enterprises to grow and succeed on Alibaba Cloud. We must seize the opportunities in both aspects.

"We are confident that the revenue from customers outside the Alibaba Group at Alibaba Cloud will resume double-digit growth in the second half of the fiscal year and gradually accelerate. With high-intensity research and development investment, we will maintain sustained profitable growth and become a leading AI cloud service provider with healthy profitability and market share." Eddie Wu said