Alibaba’s profit fell 75% as quarterly AI spending hit $10bn

Alibaba’s net profit slumped 75% to $1.54 bn in the June quarter as capital spending surged to $9.98 bn, driven by AI-related investments. Cloud revenue rose 45% to $7.14 bn, with AI product sales hitting $1.82 bn and EBITA climbing 133% to $830 m, while the newly created AI Labs unit posted a $2.04 bn adjusted loss. Free cash flow turned negative, reflecting the heavy outlay on compute capacity and rising chip prices.