China's Alibaba Eyes $100 Billion In Cloud, AI Revenue Over Five Years

Alibaba Group Holding (NYSE:BABA) announced plans on Thursday to generate $100 billion in annual external revenue from its combined cloud and AI businesses over the next five years. The Chinese cloud giant also disclosed the production progress of its T-Head chip unit for the first time.CEO Eddie Wu Yongming said token consumption on the Model Studio platform has increased sixfold over the past three months. He also predicted that model-as-a-service offerings will become the largest growth driver for the cloud division.Alibaba has begun large-scale production of its in-house GPUs, with its T-Head division shipping over 470,000 AI chips and approaching 10 billion yuan ($1.45 billion) in annual revenue over the past two years.Jiang Fan, head of Alibaba’s e-commerce business, said Alibaba aims to surpass 1 trillion yuan ($144.92 billion) in quick-commerce GMV by FY2028 and achieve profitability by next year, with current focus on improving performance metrics.Alibaba Misses Estimates, Pivots To AIAlibaba’s third-quarter revenue of $40.73 billion, a 2% year-over-year increase, fell short of the analyst consensus estimate of $41.26 billion. Excluding revenue from the divested Sun Art and Intime businesses, Alibaba's revenue would have grown 9% year-on-year.The company’s adjusted earnings per American Depositary Share (ADS) were $1.01, missing the analyst consensus estimate of $1.73. This comes amid the ongoing e-commerce wars in China, which have been impacting Alibaba’s profits.However, Alibaba is making strides in AI technology. The company recently unveiled ‘Wukong’ AI, a tool designed to automate office work and replace daily chores. Wukong can manage tasks such as editing documents, updating spreadsheets, transcribing meetings, and running research. The launch of Wukong AI is closely tied to Alibaba's internal reshuffle, which set up the Alibaba Token Hub business group and positioned enterprise AI agents as a company-wide priority.BABA holds a momentum rating of 14.43% and a growth rating of 58.71%, according to Benzinga's Proprietary Edge Rankings. The Benzinga Growth metric evaluates a stock’s historical earnings and revenue expansion across multiple timeframes, prioritizing both long-term trends and recent performance.BABA Price Action: On a year-to-date basis, Alibaba ADR declined 19.80%, as per Benzinga Pro. On Thursday, it fell 7.09% to close at $124.90.Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by a Benzinga editor.Image via Shutterstock