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Alibaba

Full-stack AI strategy, Long-term growth

To make it easy to do business anywhere
Alibaba’s mission

Full-stack AI strategy

Alibaba runs Taobao and Tmall, quick delivery, AliExpress, and Alibaba Cloud. Its strategy is full-stack AI: its own Qwen models, its own T-Head chips, and its own cloud, sold to other companies and built into its shopping apps. In 2026 it regrouped the whole company around that stack.,

AI modelsAI chipsAI cloudE-commerce

AI models

  • Bigger modelsTrain Qwen 4, with the Qwen 4.5 and Qwen 5 series planned to scale up to between 5 and 10 trillion parameters.
  • Qwen app and QwenWorkBuild apps on the models: the Qwen app for consumers, joined up with Taobao and Tmall, and QwenWork, an AI workforce agent for companies, sold through Alibaba Cloud and DingTalk.
  1. 20 August 2026Alibaba launched Qwen3.8-Max in August, three months after the version before, and published the weights of its 2.4 trillion parameters.
  2. 20 August 2026250 million people have had their first AI-driven shopping experience through the Qwen app’s agent features since it launched.

Quick commerce and cloud each grew 45%

In the June quarter of 2026 Alibaba’s revenue grew 9%. Most of the growth came from quick commerce, which delivers in under an hour through Taobao Instant Commerce and Freshippo, and from cloud. Marketplace revenue from China’s merchants fell on weaker transactions.

110.9ChinaE-commerce−8%53.3China QuickCommerce+45%48.4AI Cloud andCompute+45%27.8InternationalE-commerce−1%13.9GlobalWholesale+7%3.3AI Labs andApplications+16%

Revenue in RMB billion. The front of each parcel is in proportion to revenue. Not shown: All others, which is mainly Alibaba Health, Amap, media, and games, at RMB28.8 billion, and the eliminations between segments.

Losses on AI models and apps grew more than fourfold

Alibaba’s e-commerce group earned almost as much in the June quarter of 2026 as a year before, and cloud’s profit more than doubled. The loss in AI Labs and Applications, from building models and running the Qwen app, grew from RMB3.2 billion to RMB13.9 billion, and the group’s adjusted EBITA fell 30%.

Adjusted EBITA RMB27.3bn

01020304050E-commerce 39.7AI Cloud and Compute 5.6AI Labs and Applications 13.9All others 3.3Unallocated and eliminations 0.8

Adjusted EBITA by segment for the June quarter, in RMB billion. On the right, the businesses that made a loss, and costs not allocated to any business.

  1. Reorganise around the strategy.

    Alibaba regrouped its whole reporting structure in 2026: one e-commerce group, one segment for cloud and chips, and one for models and apps. We recommend that the way a company is organised, and reports, follows its strategy, so every team can see where it sits.

  2. Own the layers that set your costs.

    Alibaba designs its own chips as well as its models and cloud, so it can tune each layer to the others. We recommend deciding which parts of your chain decide your cost and speed, and owning those.

  3. Put the new thing where customers already are.

    250 million people have had their first AI-driven shopping experience in the Qwen app, which is joined up with Taobao and Tmall. We recommend launching a new capability inside the journeys customers already use, rather than asking them to find it.

Sources

  1. 1. Alibaba Group Holding Limited (2026). Alibaba Group announces June quarter 2026 results. Alibaba Group investor relations, 20 August 2026. data.alibabagroup.com
  2. 2. Alibaba Cloud (2026). Alibaba Cloud’s 2026 Apsara Conference: full-stack AI roadmap along with global market expansion plan. Alibaba Cloud Community, September 2026. alibabacloud.com
  3. 3. Alibaba Group (2025). Alibaba to invest RMB380 billion in AI and cloud infrastructure over next three years. alibabagroup.com, 24 February 2025. alibabagroup.com
  4. 4. Alibaba Group (2026). About Alibaba. alibabagroup.com, accessed 30 September 2026. alibabagroup.com

Headwater is not connected with Alibaba. Alibaba, Taobao, Tmall, Freshippo, AliExpress, Alibaba Cloud, Qwen, QwenWork, T-Head, Zhenwu, Yitian, 88VIP, and DingTalk are trade marks of their owners. Updated 30 September 2026.

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