The latest income boom in the Aribaba financial camp has been high for almost three years, driven mainly by cloud computing and AI operations. However, the sharp rise in capital spending and the marked decline in net profits have increased the market ' s interest in the rate of return of its AI commercialization at the high input stage.

Clouds and AI pulls income

The Aribababon financial camp received 2,68.95 billion yuan, an increase of 9 per cent over the same period, slightly higher than the market's forecast of 268.88 billion yuan. The growth of companies is mainly due to the acceleration of cloud operations, which was also the fastest quarterly increase in revenues in the last three years.

Among them, Aliyun's external income increased at a rate of 45 per cent. AI revenues from related products amounted to 12.38 billion yuan and maintained a three-digit increase over the 12th consecutive quarter. Ali Baba CEDO Wu Mio-won attributed this performance to the commercialization of the All-China AI strategy.

Capital expenditures rose to $67.7 billion.

Behind the growth in income, the cost pressures are also rising. The capital spending of the Alibababon season increased by 75 per cent each year to 67.7 billion yuan. According to the company, this was mainly due to the increase in the price of chips and the continued increase in the calculus supply in response to the expansion of AI demand.

The profit end is clearly under pressure. The net profits of the company fell to RMB 104.40 billion, a 75 per cent decline over the same period. According to Bloomberg, Ali ' s free cash flow for the current season has shifted to a net outflow of over $6.6 billion.

  • This quarter's gonna be 268.95 billion.
  • Net profit down to 104.40 billion yuan
  • Capital expenditure increased to $67.7 billion.

Qwen Speed up external distribution

Ali is recently focusing on model distribution and commercial landing, not just training capacity. Earlier this month, for the first time, the company launched a large-scale version of Qwen 3.8-Max in the form of open weights. In April, Ali also closed the free floor service of Qwen Code programming assistant.

This adjustment shows that Ali wants to drive AI business liquidations through broader model access and business use. The strategy has begun to be reflected in the distribution-end data.

Apple Partnership Extension

In the Chinese market, Apple is combining self-study models with Ali Qwen for the introduction of Apple Intelligence into the Chinese version of iPhone. If cooperation continues smoothly, apples could become the first foreign company to be allowed to operate the AI model in China.

At the same time, China ' s open weight model, which was generated in the OpenRouter platform, increased from less than 2 per cent at the end of 2024 to about 61 per cent in mid-2026. This indicates that the share of the Chinese model at the distribution end is rising rapidly.