Alibaba, one of China's biggest tech companies, just reported a big drop in profit. The company's net profit fell to 105.9 billion yuan ($15.6 billion) for the year ending March 31. This was down 18% from 129.5 billion yuan in the previous fiscal year.

This drop comes as Alibaba is spending a lot on artificial intelligence (AI). The company wants to make money from its AI investments. However, it's still unclear how it will do that. Alibaba's CEO, Eddie Wu, said the company's AI investments have progressed from testing to large-scale use.

Alibaba's core e-commerce business has been struggling. This is due to price wars and slow consumer spending in China. The company is trying to boost growth through AI. It has a focus on its Qwen AI models, which are popular with programmers worldwide.

Alibaba has been investing heavily in AI. Its goal is to become a leader in the field. The company's Qwen AI models are open-source, meaning they can be used by anyone. Alibaba has also integrated Qwen's features into its Taobao shopping app in China.

Eddie Wu said, "Alibaba's full-stack AI investments have progressed from incubation to commercialisation at scale." He also said the company sees "massive potential for agentic AI."

Alibaba's revenue grew 3% year-on-year to 243.4 billion yuan in the final financial quarter. The company's profit drop is significant. Many tech companies are investing heavily in AI right now.

Alibaba isn't the only Chinese tech company investing in AI. Tencent, another big Chinese tech firm, reported a 21% jump in quarterly net profit. Alibaba and Tencent are reportedly in talks to invest in AI startup DeepSeek. DeepSeek recently released a new AI model.

Here are some key facts:

  • Net profit: 105.9 billion yuan ($15.6 billion)
  • Year-on-year drop: 18%
  • Revenue growth: 3%
  • AI investment: tens of billions of dollars
  • Qwen AI models: popular with programmers worldwide

China's tech sector has been under regulatory pressure since 2020. Alibaba was one of the companies affected. Its co-founder Jack Ma kept a low profile during that time. Ma's reappearance in February 2025 was seen as a positive development for the company.

Alibaba's focus on AI is expected to continue. The company is looking to commercialize its AI models. Investors and analysts will be closely watching the company's performance. They're especially interested as the global AI investment boom continues.