Alibaba’s Profits Affected by Heavy Investments in AI Technology

Alibaba, the Chinese tech giant, experienced a modest three per cent increase in revenue during the fourth quarter. However, the company faced challenges in its profit margins due to intensified spending on artificial intelligence (AI) and cloud infrastructure. The ongoing investment in the rapid delivery segment, promising deliveries within 60 minutes, further strained profitability. The adjusted earnings per American Depository Share of 0.62 yuan significantly underperformed analyst predictions, leading to a 2.3 per cent decline in U.S.-listed company shares during premarket trading. Despite the profit squeeze, Alibaba, like its industry peers, has been capitalizing on the burgeoning demand for AI…