Alibaba's CEO says he doesn't see 'much of an issue' with an AI bubble and plans to invest 'aggressively'

"The CEO of the Chinese tech giant, Eddie Wu, said on Alibaba's second-quarter earnings call on Tuesday that the company "doesn't really see much of an issue in terms of a so-called AI bubble." "We're not even able to keep pace with the growth in customer demand," Wu said, adding that the pace at which Alibaba can deploy new servers is insufficient. "In the next three years to come, AI resources will continue to be under supply," he said."

"On Tuesday, Alibaba Group posted 247.8 billion yuan,or $34.8 billion, in revenue for the quarter ending September 30, a 5% increase from last year. Profits were hit by heavy spending on AI and commerce. Net income fell 53% from a year earlier to 20.6 billion yuan due to a "decrease in income from operations." Sales and marketing expenses surged, more than doubling from a year ago."

Alibaba does not see a significant AI bubble and reports customer demand exceeds its ability to deploy servers, with AI resources expected to remain undersupplied for the next three years. The surge in demand reflects real-world adoption across product development, manufacturing processes, and support for companies. Alibaba's Qwen app surpassed 10 million downloads in its first week. For the quarter ending September 30, revenue totaled 247.8 billion yuan, a 5% year-over-year increase, while net income fell 53% to 20.6 billion yuan after heavy AI and commerce spending. The cloud division grew 34% to 39.8 billion yuan, driven by AI-related public cloud revenue. Alibaba plans aggressive investment in AI infrastructure and previously announced a 380 billion yuan AI commitment.

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