Alibaba Group Holding Ltd. reported a 9% jump in revenue, driven by a boom in Chinese AI development that increased demand for the computing capacity provided by its cloud arm. Despite the revenue growth, the company saw its net income plummet between 75% and 76% in the June quarter.
The decline in net profit was attributed to economic pressure within China and large investments in artificial intelligence. The e-commerce titan continues to invest heavily in AI as it races to preserve its lead in the sector.
In response to the earnings report, Alibaba's U.S. listed shares were volatile in premarket trading. Nevertheless, the company is reclaiming its place as a favorite among investors who are betting that Alibaba can beat its rivals in the combative artificial intelligence market.