As advancements in AI technology drive profound industrial transformation, Chinese tech giant Alibaba Group Holding Ltd said it will scale up investments in artificial intelligence over the next three years, including infrastructure for AI and cloud computing, and AI foundation models and native applications, while also transforming its existing businesses with AI.

As there is clear and massive demand for infrastructure in this AI era, the company is going to aggressively invest in AI infrastructure, Wu Yongming, CEO of Alibaba Group, said in an earnings call with investors late on Thursday. "Our planned investment in cloud and AI infrastructure over the next three years is set to exceed what we have spent over the past decade."

Wu noted that the company will increase investment in the research and development of AI applications and computing power, and deeply integrate AI across its businesses to capture new growth opportunities in the AI era. "Looking ahead, we are confident in our focused strategy on e-commerce and AI plus cloud," he said.

Wu's remarks came after Alibaba reported revenue of 280.15 billion yuan ($38.63 billion) during the October-December period, an increase of 8 percent year-on-year, with net income reaching 46.43 billion yuan, surging 333 percent year-on-year.

For the quarter ending on Dec 31, revenue from its cloud business rose 13 percent year-on-year to 31.7 billion yuan, with artificial intelligence-related product revenue achieving triple-digit growth for the sixth consecutive quarter.

"This quarter's results demonstrated substantial progress in our'user first, AI-driven' strategies and the reaccelerated growth of our core businesses," Wu said, adding that revenue growth at Alibaba Cloud Intelligence Group driven by AI will continue to improve.

Wu emphasized that the company will continue to focus on three business categories, namely, domestic and international e-commerce, AI and cloud computing, as well as internet platforms. Moreover, Wu said they will soon release a deep reasoning model built on its large language model Qwen 2.5-Max.

Revenue from Alibaba's core e-commerce business, namely its Taobao and Tmall platforms, rose 5 percent year-on-year to 136.1 billion yuan during the period.

Jiang Han, a senior analyst at market consultancy Pangoal, said Alibaba's cloud computing business has returned to double-digit growth and has become an important engine driving its overall revenue growth. It also highlighted that the company has a strong competitive advantage in the AI and cloud services sector, with its investments and layout in AI achieving remarkable results.

Jiang noted an increasing number of enterprises are seeking to bolster digital transformation and upgrading, while improving operational efficiency through the adoption of AI technology, which brings immense business opportunities for Alibaba and provides strong support for its revenue growth.

The company's increased investment in AI will propel the application of such cutting-edge technology in a broad range of sectors, while motivating other tech companies to pool more resources into R&D and technological innovation amid intensifying competition in the AI field, he added.

The company's share price has surged roughly 60 percent over the past month as Chinese startup DeepSeek launched a new AI model at significantly lower costs than its foreign counterparts, raising optimism for the future demand of AI and cloud services.

Alibaba recently inked partnership with US consumer electronics company Apple to roll out AI features for iPhone users in China. Moreover, it has unveiled its latest AI model, Qwen 2.5-Max, which boasts enhanced math and coding capabilities and has outperformed other leading AI models such as US-based OpenAI's GPT-4o and DeepSeek's V3.

Mo Daiqing, a senior analyst at the Internet Economy Institute, a domestic consultancy, said both Taobao and Tmall e-commerce platforms are still facing mounting pressures and competition from domestic rivals such as PDD Holdings and JD, adding that more efforts should be made to improve the online shopping experience for users while also controlling operational costs.