TECH

Alibaba Cloud Revenue Jumps 36% as AI Strategy Pays Off

Published: Mar. 20, 2026 5:45 p.m. GMT+8

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A visitor looks at Alibaba’s T-Head chip display in Shanghai. Photo: VCG

Alibaba Group Holding Ltd. reported a 36% jump in its cloud division’s quarterly revenue, as demand for artificial intelligence services surged and the company accelerated efforts to monetize its AI investments.

For the quarter ended Dec. 31, Alibaba Cloud’s revenue reached 43.3 billion yuan ($6 billion), according to an earnings report released Thursday. The division’s adjusted earnings before interest, taxes, and amortization (EBITA) grew 25% year-on-year to 3.9 billion yuan, slowing from the previous quarter as higher spending on customer acquisition and technology weighed on margins, the parent company said.

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Alibaba Cloud’s Q4 revenue rose 36% YoY to 43.3 billion yuan ($6B), with adjusted EBITA up 25% to 3.9 billion yuan.
The firm is consolidating AI efforts under the new Alibaba Token Hub; CEO targets $100B in annual cloud and AI revenue within five years.
T-Head shipped 470,000 chips as of February; the consumer Qwen app topped 300 million monthly users, but key AI team leader Lin Junyang resigned.

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Who’s Who

Alibaba Group Holding Ltd.: Alibaba Group Holding Ltd. saw its cloud division's quarterly revenue jump 36% to 43.3 billion yuan ($6 billion), driven by surging AI demand. The company is shifting towards commercializing its AI investments, with CEO Wu Yongming targeting $100 billion in annual cloud and AI revenue within five years. Alibaba also launched Alibaba Token Hub (ATH) and its chip unit, T-Head, has shipped 470,000 chips.

Alibaba Cloud: Alibaba Cloud reported a 36% rise in quarterly revenue, reaching 43.3 billion yuan ($6 billion), driven by surging demand for AI services. Its adjusted EBITA grew 25% year-on-year. The company is shifting its AI strategy towards commercialization, targeting $100 billion in annual revenue for cloud and AI businesses within five years. Alibaba also launched the Alibaba Token Hub to better align AI models with applications and introduced enterprise AI agent app Wukong.

Alibaba Token Hub: Alibaba Token Hub (ATH) was established by Alibaba to consolidate multiple AI teams under CEO Wu Yongming's direct leadership. This move aims to better align AI models with their applications and prioritize building models with the strongest intelligent capabilities, requiring a concerted effort across the ATH group.

T-Head: T-Head (平头哥半导体有限公司) is Alibaba's chip design unit. As of February, it has shipped 470,000 chips, with over 60% used by external clients. T-Head generates 10 billion yuan in annualized revenue and designs AI chips like the Zhenwu 810E. T-Head is considered "crucial" by Alibaba's CEO due to predicted AI computing power shortages.

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What Happened When

By Dec. 31, 2025：: Alibaba Cloud’s revenue reached 43.3 billion yuan for the quarter ended, with results disclosed in an earnings report.

January 2026：: T-Head updated its website with the Zhenwu 810E AI chip.

As of February 2026：: Alibaba’s chip design unit, T-Head, shipped a cumulative total of 470,000 chips with over 60% used by external customers.

February 2026：: Qwen app's monthly active users exceeded 300 million, following a 3 billion yuan Spring Festival promotion.

March 16, 2026：: Alibaba established the Alibaba Token Hub (ATH), consolidating multiple AI teams under Wu Yongming’s direct leadership.

March 17, 2026：: Alibaba launched the enterprise AI agent app, Wukong.

March 19, 2026：: Alibaba released its earnings report and CEO Wu Yongming set a $100 billion annual revenue target for the cloud and AI businesses over the next five years during the earnings call.