Alibaba: AI and Automation Drive Efficiency Gains Across Global Logistics Networks
Alibaba Group reported strong progress in AI for the December quarter, with accelerating revenue growth in the Cloud Intelligence Group and significant momentum in consumer AI adoption led by the Qwen App.
Excluding disposed businesses, the Group’s total revenue grew 9% to RMB284,843 million (US$40,732 million) year-over-year on a like-for-like basis. The company is scaling its strategic investments in AI and Cloud and has made progressive moves toward organizational realignment.
“Looking ahead, we are well-positioned to drive growth on both enterprise AI and consumer AI fronts, powered by our full-stack AI capabilities spanning foundation models, cloud infrastructure, and proprietary chips, alongside deep integration with our broader ecosystem,” said Eddie Wu, Chief Executive Officer of Alibaba Group.
“Our strong liquidity position and resilient cash generation provide a solid foundation to support sustained strategic investment,” said Toby Xu, Chief Financial Officer of Alibaba Group.
Scaling AI with Full-Stack Capabilities
AI continued to serve as a growth engine, driving Cloud Intelligence Group revenue up 36% to RMB43,284 million (US$6,190 million), with AI-related product revenue delivering triple-digit growth for the tenth consecutive quarter.
Central to Alibaba’s AI offering is the Qwen model family. In February, Alibaba launched Qwen3.5, which delivered impressive performance across reasoning, coding, agentic tasks, and multimodal understanding. The Qwen suite has become the world’s most widely used open-source model family, surpassing one billion cumulative downloads on Hugging Face as of January 21, 2026.
A highlight for the quarter is the Qwen App, which marks a pivotal milestone in Alibaba’s AI strategy. By translating frontier model leadership capabilities into scalable, real-world applications, consumer-facing Qwen surpassed 300 million monthly active users across all platforms as of February, demonstrating strong consumer adoption.
Complementing its foundation models, Alibaba’s chip design subsidiary T-Head has brought proprietary GPUs into scaled production. These GPUs support end-to-end AI workloads, from training and fine-tuning through to inference, strengthening Alibaba’s long-term computing capacity. By integrating T-Head’s chip capabilities with Qwen models and cloud infrastructure, Alibaba delivers highly cost-effective AI services to external customers.
This vertical integration, spanning proprietary chips, cloud infrastructure, frontier models and application-layer platforms, is increasingly recognized as a structural competitive advantage. Morgan Stanley’s latest research, “China’s Emerging Frontiers,” names Alibaba a Top Pick, citing its ability to optimize the entire AI value chain and drive monetization across both infrastructure and applications. The analysis reinforces remarks from Joe Tsai, Chairman of Alibaba Group, who noted at the World Government Summit 2026 that integrated, full-stack companies hold a significant competitive advantage in generating lasting commercial value.
