Alibaba's profit plummets 75% due to AI investment costs

In China, Alibaba reported a 75% drop in profit for the quarter ending June 30, 2026, due to heavy investments in AI infrastructure. The company's net income fell to 10.4 billion yuan ($1.54 billion), while revenue increased by 9% to nearly 269 billion yuan ($40 billion). Despite the profit decline, revenue from AI-related services surged by 45%. Alibaba's operating income also dropped significantly, reflecting the impact of increased spending on AI and computing infrastructure.