For all the excitement around artificial intelligence, investors have had surprisingly little visibility into one key question: how much revenue is AI actually generating? Alibaba Group Holding Ltd. (NYSE:BABA) (OTC:BABAF) offered one of the clearest answers yet during its fiscal first quarter earnings call, revealing that AI-related products now account for 35% of Alibaba Cloud’s external revenue—a rare metric that shows AI is becoming a meaningful commercial business rather than simply a growth narrative.
Alibaba Puts a Number on AI Monetization
Chief Executive Officer Eddie Wu said the annual revenue run rate from AI-related products exceeded RMB 49.5 billion ($7.34 billion), adding that AI’s share of Alibaba Cloud’s external revenue “rose to 35%” during the quarter.
Chief Financial Officer Toby Xu reinforced the point, saying AI-related product revenue delivered a “12th consecutive quarter of triple-digit growth.” Xu added that quarterly AI-related revenue reached RMB 12.4 billion ($1.84 billion), implying an annualized run rate of RMB 49.5 billion.
While technology companies have broadly touted growing demand for AI, few have disclosed what percentage of their cloud revenue is directly tied to AI products. Alibaba’s latest disclosure therefore offers investors a more tangible measure of how quickly AI is becoming embedded in its cloud business.
