E-commerce China’s Alibaba reported a 75 per cent fall in quarterly net profit on Thursday as the tech giant heavily ramped up AI capital expenditure, betting future growth on its enterprise cloud and AI model services. The group reported a 9 per cent rise in revenue for April-June, as strong AI demand fuelled growth in its cloud business. Demand for the cloud computing power needed to train and run enterprise AI systems has surged, benefiting China’s largest technology companies. “In order to be able to capture that future growth, we first need to make these capex investments to build out the necessary compute capacity,” Wu told an earnings call. “As we ramp up deployment of our own proprietary chips in our data centres … and replace commercially procured chips, we can expect to see substantially higher gross margin as well as profitability.