Ali Q3 Call Conference: Investment in cloud and AI infrastructure in the next three years is expected to exceed the total of the past decade

Picture from Visual China

Blue Whale News, February 21 (Reporter Wu Jingjing)On February 20, Ali announced its Q3 financial report for the 2025 fiscal year. Its revenue was 280.15 billion yuan, a year-on-year increase of 8%, and the fastest growth rate in a year; net profit reached 46.434 billion yuan, a year-on-year increase of 333%. The higher-than-expected performance led to a pre-market gain of more than 10%.

Specifically looking at the business segment, during the reporting period, Taotian Group’s revenue was 136.091 billion yuan, a year-on-year increase of 5%. During the phone conference, executives mentioned that the e-commerce business sector saw strong year-on-year growth in new buyers and orders. During the Q3 performance call, Jiang Fan, the newly appointed CEO of Alibaba’s e-commerce business group, said that the medium and long-term goals of the domestic e-commerce business are to continue to stabilize market share, improve user experience, optimize merchant operating efficiency and improve the business environment.

Jiang Fan further mentioned that B2B business will bring considerable profits in the next few years. B2C business has made a lot of optimizations in cross-border business in the past, and has significantly seen improvements in profits and losses. It is also actively seeking local platform cooperation in some countries.

During the reporting period, the revenue of International Digital Commerce Group increased by 32% year-on-year to 37.756 billion yuan, mainly driven by the strong performance of cross-border business. Jiang Fan mentioned in the telephone conference that it is impossible to predict whether international business is more profitable than domestic business, but the profit path of international business is relatively clear.

In the local life sector, during the reporting period, the company’s revenue increased by 12% year-on-year to RMB 16.988 billion, driven by the overall order growth of Gaode and Enemao and the growth of revenue from marketing services.

During the Alibaba Group Q3 results call, company executives responded to the previous incident of withdrawing some physical retail assets that there are currently no plans to sell Hema, but strategic investors will be introduced. Executives said: InWhile actively withdrawing from non-core investments, we will still focus on our main business.Hema has good growth and steady expansion, and has also achieved very good profits, fully demonstrating the success of the online and offline integrated digital retail strategy.There are currently no plans to sell Box Horse, but we will use an open mind, such as introducing strategic investors, think about how to make the value of Box Horse ultimately reflected in Alibaba Group’s valuation.” rdquo;

The much-watched cloud business sector performed well. Alibaba CEO Wu Yongming said that Alibaba Cloud’s revenue returned to double-digit growth of 13%.AIRevenue from related products maintained triple-digit growth for six consecutive quarters.

Wu Yongming also talked about the impact of DeepSeek during the phone conference. It is true that the differences in capabilities of various major models are gradually narrowing, including the insignificant differences in capabilities between open source and closed source models. However, this is good for cloud computing companies, because most open source models need to be built in a cloud computing network. If AI is the biggest commodity of the future, cloud computing networks are the power grid today. rdquo;

DeepSeek has driven the growth of reasoning needs, and Alibaba Cloud has already clearly felt it. Wu Yongming mentioned thatspring FestivalPost-reasoning needs have exploded significantly, with 60% of the new customer needs being used for reasoning.He revealed thatAli will soon release a deep reasoning model based on Qianwen Qwen2.5-MAX.Previously, at the end of January, Ali released Qwen 2, the flagship version of the AI basic model Qianwen.

Another highlight of the phone call was Ali’s future capital investment plan.Alibaba Group CEO Wu Yongming said that Alibaba will actively invest in AI infrastructure construction,Infrastructure investment in cloud and AI in the next three years is expected to exceed the total of the past decade。& rdquo;

Wu Yongming mentioned that in the future, he will continue to focus on three major business types: domestic and foreign e-commerce business, AI+ cloud computing technology business, and Internet platform products. Focusing on the core AI strategy, we will increase investment in three aspects: AI infrastructure, basic model platforms and AI native applications, and AI transformation of existing businesses.

Wu Yongming said that the primary goal in Ali’s AI strategy is to pursue AGI and constantly pursue to break through the boundaries of model intelligence capabilities. Why should the realization of AGI become our first goal, which may far exceed any application we can see now? Because all application scenarios now, whether they are productivity creation tools, Al search, or ChatGPT, are just some opportunities in the process of improving AI capabilities. In the future, AI-related industries will be the world’s largest industries, replacing the current composition of 50% of GDP. rdquo;

Large capital investment will affect the company’s profit margin performance, so in response to analysts ‘questions, Wu Yongming said that the expansion of the customer base and application industry driven by the current large model will increase profit margins to some extent.AIInvestment will affect profit margins to a certain extent. He also mentioned that China and the global cloud market are different, and profit margins will also differ.