Alibaba's Vision for AI and Cloud Computing

Alibaba Group Holding Limited, known as Alibaba, has made a significant statement regarding the future of artificial intelligence (AI) and its role in cloud computing. The company's executives argue that the true value of AI lies within cloud infrastructure, rather than the AI models themselves.

Recent Developments: During Alibaba's third-quarter earnings call, a high-ranking executive discussed the recent advancements made by DeepSeek, particularly in the realm of free large-language models and the monetization tactics surrounding AI.

The executive pointed out that there is a growing similarity in the capabilities of AI models, whether they are closed-source or open-source. This indicates that simply having an advanced model may not be enough to differentiate companies in the marketplace.

“If we consider AI to be like electricity in our modern world, then our cloud computing network serves as the power grid that supplies this electricity,” stated the executive. This analogy emphasizes the integral role that cloud infrastructure will play in facilitating AI operations.

Cloud as Revenue Driver: Instead of concentrating on profits from AI models, Alibaba identifies cloud computing as their main source of AI monetization. The executive elaborated, “When it comes to our monetization strategy, it is clear that our cloud computing services are designed to host and support the deployment of these AI applications.”

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Significance of Alibaba's Growth: Alibaba, co-founded by Jack Ma, has shown robust growth, reporting a revenue figure of $38.38 billion for the fiscal third quarter, marking an 8% increase compared to the previous year. This surpassed analysts' expectations, who had forecasted revenue of $38.19 billion.

Moreover, revenue from the Taobao and Tmall Group grew by 5%, reaching $18.64 billion, while the Cloud Intelligence Group reported a commendable 13% year-over-year growth, totaling $4.35 billion.

In terms of capital expenditures, Alibaba invested $31 billion this quarter alone, which is almost double the amount spent in the previous quarter. The company plans to continue this trend, committing to invest more in the next three years than it has in the last decade combined.

Stock Movement: As of now, Alibaba's shares have experienced a slight uptick, rising 0.82% to $137.09 in after-hours trading, following an impressive 8.09% jump during the regular trading session.

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Conclusion: Alibaba emphasizes the future landscape of AI as heavily reliant on cloud infrastructure, highlighting the importance of the underlying technology in driving AI capabilities and commercial success.

Alibaba, AI, Cloud, Technology, Revenue