AIbase Report - On August 29, Alibaba Group released its first-quarter financial report for fiscal year 2026, with performance far exceeding market expectations. Excluding the impact of divested businesses, the group's overall revenue grew steadily by 10% year-over-year, and net profit increased significantly by 76%, fully demonstrating the significant results of investments in the two strategic areas of AI + Cloud and consumer business.
Alibaba Cloud performed particularly outstandingly this quarter, with a 26% year-over-year increase in revenue, achieving the highest growth rate in three years. This achievement was mainly driven by strong demand for AI, as revenue from AI-related products has achieved triple-digit growth for eight consecutive quarters.
Alibaba has established a complete technology stack from AI computing power, AI cloud platform, AI models to application open-source ecosystem, effectively supporting AI needs across industries. In this quarter, capital expenditure on AI + Cloud reached 38.6 billion yuan, increasing by 220% year-over-year, showing a firm commitment to AI infrastructure construction.
Recently, the Tongyi AI large model has shown impressive performance, continuously open-sourcing the Qwen 3 non-thinking basic model, reasoning model, and AI programming model, winning the global open-source championship in mainstream fields such as basic models, programming models, and reasoning models. Additionally, other multi-modal products such as the video generation model Wan2.2 and the text-to-image model Qwen-Image have also been open-sourced.
It is reported that the instant retail business launched at the beginning of April has quickly shown results, successfully driving a 25% year-over-year increase in monthly active consumers of the Taobao app within the first three weeks of August, demonstrating strong user attraction and market potential.
Through the strategic integration of Taotian Group, Eleme, and Fliggy, the Alibaba China E-commerce Group was officially established, building a comprehensive consumption platform covering all scenarios. The integration has brought significant synergies, with monthly active users and daily orders continuing to break historical records.
In addition, the Taobao VIP membership system was officially launched, integrating membership benefits from Eleme, Fliggy, and Gaode, covering all aspects of life including clothing, food, accommodation, and travel. The number of 88VIP members has continued to grow by double digits year-over-year, exceeding 53 million.
Multiple core products have completed AI upgrades: Gaode Map launched the world's first AI-native application based on maps - Gaode Map 2025; DingTalk created the world's first work information flow driven by Agent; the Taobao platform has achieved comprehensive AI application upgrades in AI search, AI advertising platforms, and more.
Jack Ma, CEO of Alibaba Group, said, "In this quarter, we focused on the consumer and AI + Cloud strategies, achieving strong growth. Looking ahead, we will continue to firmly invest in the two strategic focuses of large consumer and AI + Cloud, seize historical opportunities, and achieve long-term growth."
The financial report shows that while firmly investing in the two strategic areas, the operational efficiency of Alibaba's various business lines continues to improve. Revenue of Alibaba's International Digital Commerce Group increased by 19% year-over-year, approaching break-even; the operating performance of businesses such as Hema, Gaode, Hu Jing Entertainment, and Alibaba Health has also continuously improved.
