Alibaba reports operating loss for first time since 2021 after AI investment surge

Alibaba, a Chinese tech giant, faces operating loss amid heavy investment in AI and cloud.

Alibaba reported on Wednesday, May 13 that its core faced a significant drop in the March quarter first time since covid-19 pandemic.

The e-commerce and tech giant posted a loss from operation of 848 million yuan ($125 million) for the March quarter.

At the same time, revenue during the period increased just less than estimated 3%.

Although Alibaba Group Holding Ltd.’s net income doubled, much of that was driven by equity investment gains.

Alibaba has remained consistent with focus on investments in semiconductors for artificial intelligence, data centers and creating its own line of models: Qwen.

The results are evident from its profit in cloud computing segment.

It posted a 38% annual growth in revenue in the March quarter to 41.6 billion yuan.

The growth was recorded faster when compared with the previous quarter.

Alibaba highlighted AI-related revenue at 9 billion yuan.

In the recent past, Alibaba has placed itself as one of China’s key players, designing semiconductor chips for AI and rolling them out via its cloud computing unit.