China’s e-commerce leader posted a triple-digit percentage gain in AI-related product revenue as well as a better-than-anticipated 26% jump in sales from the cloud division—the business most closely tied to the artificial intelligence boom.

That helped assuage investors nervous about the fallout from a worsening battle with Meituan and JD.com Inc. in internet commerce. Alibaba’s shares gained their most intraday since November 2022 in Hong Kong, boosting the company’s market value by more than $50 billion. Turnover in the stock marked a record high as of early afternoon. The rally helped energize the broader AI sphere: Ernie-developer Baidu Inc. gained as much as 5.8%, while Tencent Holdings Ltd. also climbed.

“Alibaba’s earnings underscore a bifurcation within China tech: AI is delivering scalable growth, while traditional consumer-facing segments remain mired in destructive price competition,” said Charu Chanana, chief investment strategist at Saxo Markets. 

“The triple-digit surge in AI revenue and robust cloud sales show Alibaba is repositioning for longer-term relevance in the tech stack, not just retail dominance,” she added.

Alibaba’s progress in AI—where it is considered among the front-runners in Chinese artificial intelligence development—helped gloss over concerns about the three-way battle gripping online commerce. 

That dealt more damage than anticipated to some of the country’s e-commerce leaders: JD’s profit halved in the quarter while Meituan warned of major losses, triggering a $27 billion selloff of the three companies’ shares last week. 

The AI element helps explain why Alibaba’s stock has easily outpaced its more commerce-reliant rivals this year. Alibaba has also leveraged the growth of an international arm that encompasses some of the world’s most-recognized online shopping platforms from Lazada to AliExpress.

It has “China’s best AI enabler thesis,” Morgan Stanley analysts including Gary Yu wrote in a research note. That’s as losses from meal delivery and instant commerce peak this quarter, they said.

Investors are now focused on whether Alibaba will pursue that margin-eroding competition, at a time it’s declared record amounts of spending toward developing AI services and computing. 

On Friday, commerce chief Jiang Fan argued that investments in quick commerce—food delivery and instant shopping—had already driven 20% growth in users on its main Taobao marketplace. The fledgling division has in four months grown to the point that it can begin to achieve economies of scale, he added.

Alibaba is simultaneously making substantial investments in the AI field, developing large language models to avoid falling behind in a critical technological race. 

The company views AI as essential to its future, whether in terms of providing cloud computing, powering its core business or coming up with services to challenge OpenAI and DeepSeek. CEO Eddie Wu went as far as saying in February that artificial general intelligence, or AGI, is now the company’s primary objective.

Just last week, Alibaba updated its own open-source video generating model, part of a string of recent upgrades that span the gamut from agentic AI services to chatbots.

It remains to be seen if Alibaba can turn AI into a money-spinner in an increasingly competitive field. From Baidu to Tencent, Chinese firms are enhancing and releasing AI models at a frenetic pace, increasing the pressure on Alibaba to deliver breakthroughs.

“Alibaba’s breakout reinforces a broader theme in Asia: while global tech remains preoccupied with geopolitics and valuations, parts of China tech are quietly reaccelerating—driven not by hype, but by real revenue growth in AI and cloud,” Chanana said. “This isn’t a broad-based rotation yet—but the divergence is real.”

“Alibaba’s breakout reinforces a broader theme in Asia: while global tech remains preoccupied with geopolitics and valuations, parts of China tech are quietly reaccelerating—driven not by hype, but by real revenue growth in AI and cloud,” Chanana said. “This isn’t a broad-based rotation yet—but the divergence is real.”

The main catalyst is increasing enterprise adoption of AI. A 2025 PYMNTS Intelligence report shows that 9 in 10 chief financial officers (CFOs) see “very positive ROI” from generative AI. That’s up substantially from 26.7% in March 2024.

“With gen AI yielding such strong results, CFOs are utilizing the technology in more areas of their businesses,” the report said. These include using the technology for high-, medium- and low-impact tasks.

Cloud providers are some of the clearest beneficiaries of this demand. According to Statista, cloud infrastructure service revenues are expected to exceed $400 billion for the first time. Cloud market has re-accelerated in recent quarters, mainly due to the AI boom, the research firm said.

Consider the following:

• CoreWeave, as a purely AI cloud provider, posted Q2 revenue that more than tripled to a record $1.21 billion from $395 million a year earlier. It’s a reflection of accelerating demand for its GPU‑powered AI cloud services, though soaring operating expenses led to a net loss.
• Microsoft recorded a 39% year‑over‑year gain in Azure and other cloud services revenue in its fiscal fourth quarter. Its Intelligent Cloud segment posted $29.9 billion in revenue, up 26%. For the year, Azure surpassed $75 billion in revenue, up 34% largely due to AI workloads.
• Google Cloud saw Q2 revenue rise by 32% to $13.6 billion compared to the prior year. Operating income for cloud soared 133% to $2.8 billion. Alphabet CEO Sundar Pichai said the company raised its capex to $85 billion in 2025 due to “strong and growing demand” for cloud services.
• AWS posted $30.9 billion in cloud revenue in Q2, up 17% from a year ago. Operating income rose 10% to $10.2 billion. Its backlog grew to $195 billion, up 25% year‑over‑year, prompting CEO Andy Jassy to caution that capacity constraints may limit near‑term growth.

Semiconductor companies supplying GPUs and networking chips to hyperscalers are seeing explosive gains. Nvidia, the most valuable company in the world and whose chips command the lion’s share in powering AI workloads, reported record data center revenue of $39.1 billion in its fiscal Q1, up 73% from a year ago.

AMD’s Q2 revenue rose by 32% year over year to $7.7 billion, with its data center segment taking up $3.2 billion of the total, up 14% from a year ago due to “strong demand” for its EPYC processors and growing interest in AI platforms. Net income rose by 229% year over year.

Read more: The CAIO Report: Since March, Triple the CFOs Report Very Positive ROI from GenAI

‘Unprecedented’ AI Demand Boosts Related Industries

In data storage, Snowflake, the cloud data warehouse platform, crossed the $1 billion revenue quarterly mark in May for the first time due to the rising tide of artificial intelligence workloads. The company just earned an upgrade from BofA due to strong customer demand tied to AI investments.

Databricks, Snowflake’s rival, is also in high gear. The company said it is raising funds that would value it at $100 billion. It plans to use the funds to accelerate its AI strategy as well as for future AI acquisitions and deepen AI research. Databricks CEO Ali Ghodsi said there is “tremendous interest because of the momentum behind our AI products.”

In servers, Dell has emerged as a standout beneficiary of AI-fueled demand. Its Q1 fiscal 2026 Infrastructure Solutions Group — which includes servers and networking — posted record revenue of $6.3 billion. In the quarter, Dell generated $12.1 billion in AI orders, which surpassed all of fiscal 2025 combined. COO Jeff Clarke described the surge in demand as “unprecedented.”

In semiconductor manufacturing, Taiwan’s Foxconn said for the first time, revenue from servers and cloud infrastructure overtook smartphone assembly. Cloud and networking products now account for 41% of its total revenue in Q2, according to the Financial Times. Foxconn expects AI server revenue to increase by 170% year over year in Q3. CEO Kathy Yang cited “very strong demand” for AI servers for the robust gains.

Among data center operators, Digital Realty saw a 10% increase in revenue to $1.49 billion in Q2, outpacing its historical growth rate. The company raised its full year revenue guidance to $5.93 billion, up from $5.83 billion. Management cited AI-driven digital transformation and cloud growth as catalysts for top line growth.

Privately held Vantage Data Centers last week announced a $25 billion investment in West Texas to build a “mega-scale” 1.4GW data center campus in Shackelford County. Called “Frontier,” the campus will boast 10 data centers totaling 3.7 million square feet. The company called customer demand for AI data centers “unprecedented.”

Read more:

Databricks Projects $1 Billion in Revenue From Data Warehouse Business

Amazon Eliminates Hundreds of Cloud Computing Jobs

Why Does Google Want Multi-Cloud Security Platform Wiz So Badly?

By Choonsik Yoo ( September 1, 2025, 07:26 GMT | Insight) — South Korea’s defense ministry is shifting from research and preparation to actively adopting AI technologies, with a comprehensive defense AI policy paper planned by early 2026, a ministry official told MLex. The move reflects President Lee Jae Myung’s pledge to make use of AI across the country the main driver of economic recovery. Initial applications will focus on administration, manpower management and surveillance systems, while large-scale combat uses are expected to take longer due to technological challenges.

South Korea’s defense ministry plans to begin adopting artificial intelligence technology as broadly as possible, moving away from its previous strategy of focusing primarily on study and preparation, and acknowledging the sustained proliferation of AI across industries and countries….

Prepare for tomorrow’s regulatory change, today

MLex identifies risk to business wherever it emerges, with specialist reporters across the globe providing exclusive news and deep-dive analysis on the proposals, probes, enforcement actions and rulings that matter to your organization and clients, now and in the longer term.

Know what others in the room don’t, with features including:

• Daily newsletters for Antitrust, M&A, Trade, Data Privacy & Security, Technology, AI and more
• Custom alerts on specific filters including geographies, industries, topics and companies to suit your practice needs
• Predictive analysis from expert journalists across North America, the UK and Europe, Latin America and Asia-Pacific
• Curated case files bringing together news, analysis and source documents in a single timeline

Experience MLex today with a 14-day free trial.