Alibaba profits soar, cloud revenue declines

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Alibaba Cloud, the cloud computing arm of Chinese tech giant Alibaba, reported revenue growth of 4% in the second quarter of 2023, but a 106% surge in earnings.

CEO Daniel Zhang attributed the slowdown in revenue growth to the normalization of demand for cloud services as pandemic measures were lifted and people returned to work and school. However, he said that lower traffic also led to lower costs, which helped to boost profits.

Zhang also highlighted Alibaba Cloud’s efforts to make its cloud platform more capable of handling AI workloads, and its decision to open source its own AI models to drive engagement and consumption. He predicted that these changes will help to boost growth at Alibaba Cloud in coming quarters and years.

Alibaba reported solid financial results for the second quarter. Revenue of $32.3 billion was up 14% year over year, and net income of $4.7 billion represented a 51% jump. Zhang also acknowledged that the company faces “uncertainties in the pace of post-COVID recovery,” but said that Alibaba’s e-commerce and logistics businesses are growing strongly outside China.

The sources for this piece include an article in TheRegister.

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