Alibaba BABA believes accelerating AI cloud demand could become the primary driver of enterprise growth in FY2027 as the commercialization of its AI infrastructure and model services gains momentum. During the fourth quarter of fiscal 2026, Cloud Intelligence Group’s external revenue growth accelerated 40% year over year, supported by triple-digit AI-related revenue growth for the 11th consecutive quarter. AI products now account for nearly 30% of external cloud revenues and are expected to exceed 50% within about a year.
On May 20, Alibaba unveiled a full-stack AI upgrade at its Alibaba Cloud Summit in Hangzhou, introducing the Qwen3.7-Max large language model, the Zhenwu M890 AI chip and the Panjiu AL128 Supernode Server for large-scale AI training and inference. The company mentioned that Qwen3.7-Max operated autonomously for 35 hours and executed more than 1,000 tool calls in benchmark testing. Alibaba also revealed the Zhenwu V900 and Zhenwu J900 chips, slated for the third quarter of 2027 and the third quarter of 2028, respectively. The launch strengthens Alibaba’s AI cloud demand outlook by expanding its in-house AI infrastructure, improving enterprise AI performance and attracting more customers seeking advanced agentic AI computing solutions on Alibaba Cloud.
