Alibaba rebuilds around AI after Beijing's crackdown

A recovery built on cloud and commerce

Alibaba regained nearly $100 billion in market value in 2025 as stronger sales and a new focus on artificial intelligence helped revive a company battered by Beijing's technology crackdown. Revenue rose 8 percent to 280.2 billion yuan in the December quarter, its fastest growth in more than a year.

The recovery reached several parts of the business. Cloud revenue, which includes AI projects and computing power sold to outside customers, climbed 13 percent to about $4.3 billion. International commerce revenue rose 32 percent, supported by platforms including AliExpress and Trendyol.

Alibaba's shares jumped after the results. Its market value nevertheless remained below the peak reached before the crackdown, a reminder of the scale of the losses that preceded the rebound.

Chairman Joe Tsai and chief executive Eddie Wu have put core online commerce and AI at the center of the recovery. Their strategy connects Alibaba's established shopping businesses with its cloud operations, while directing money and management attention toward data and computing.

How the crackdown changed Alibaba

Beijing halted Ant Group's initial public offering in 2020, interrupting the planned sale of shares to public investors. Regulators subsequently imposed a $2.8 billion antitrust fine on Alibaba. More than $400 billion in market value disappeared as the company faced investigations, management changes and public silence from founder Jack Ma.

Competitors used that period to press their advantage in China and overseas. Analysts questioned whether a company that had once been a champion of Chinese internet services could recover its momentum.

Alibaba's recent gains therefore follow a period of damage extending beyond its share price. The clampdown had also weakened client confidence, while leadership changes and competitive pressure forced the company to reconsider which businesses deserved its attention and investment.

A restructuring followed by a change of direction

Alibaba launched one of the largest restructurings in its history in 2023. It divided operations into separate business groups covering online commerce, cloud intelligence, global retail, logistics, local services and entertainment.

The structure gave individual units more autonomy and accountability. In practical terms, the groups gained more responsibility for their own decisions and performance, instead of operating entirely through a single central organisation.

Wu became chief executive and Tsai returned as chairman. Both had deep roots in Alibaba. Their leadership combined the restructuring with a narrower set of priorities, reducing the attention given to sprawling side projects and directing cash toward businesses that could grow through data and computing.

Alibaba later abandoned a planned separation of its cloud group after new chip export controls made the outlook uncertain. Cloud remained inside the company and became central to its strategy. The change meant that a business once earmarked for separation instead became a foundation for Alibaba's AI ambitions.

The main developments unfolded over several years:

• 2020: Beijing halted Ant Group's initial public offering.
• After the halt: Alibaba received a $2.8 billion antitrust fine and endured investigations, leadership changes and a steep loss of market value.
• Late 2022: The release of ChatGPT pushed Alibaba's management to accelerate its AI efforts.
• 2023: Alibaba reorganised into separate business groups, with Wu becoming chief executive and Tsai returning as chairman.
• 2025: Stronger quarterly results, renewed investment plans and Ma's appearance at a meeting chaired by President Xi Jinping marked the recovery.

Two priorities inside the company

Wu asked Alibaba's teams to think like a startup and established two guiding priorities: putting users first and making AI central to the business. The approach sought to restore urgency inside a large organisation while keeping investment focused on its main sources of growth.

Alibaba placed AI at the center of its cloud unit and adopted an open source family of models that developers could use and adapt. An AI model is the underlying system that performs tasks such as generating text; allowing developers to adapt it gives them a way to build applications around it.

Cloud computing supplies computing power to customers rather than requiring each customer to build and operate all of that equipment itself. Within Alibaba's strategy, the cloud business houses AI projects while also providing the computing resources outside clients need.

Tsai and Wu's choices brought the company's priorities closer together. Shopping remained the core business, cloud supplied computing capacity, and AI became a focus for both investment and practical tools used by merchants.

Retail remains the engine of the recovery

Taobao and Tmall returned to the center of Alibaba's domestic growth strategy. The platforms focused on lower prices, quality control and shopping through live video as rivals from PDD and ByteDance took market share.

Those priorities addressed the competitive pressure that had intensified during Alibaba's difficult years. Price, product quality and the shopping experience remained central to winning customers, even as management devoted more attention to AI.

Singles Day, the large shopping festival held in November, again became a testing ground for AI tools. Merchants used those tools to help create product pages, target promotions and manage customer service at scale.

These uses connect the AI strategy to everyday retail work. Creating product pages means preparing the information shoppers see, while targeting promotions means directing sales messages toward potential customers. Managing service at scale means handling customer needs across a large volume of shopping activity.

Alibaba's domestic retail effort therefore sits alongside its AI investment rather than apart from it. The company is trying to strengthen the shopping businesses that built its position while applying new tools to the work merchants perform on those platforms.

International commerce grows faster than cloud

AliExpress and Trendyol, which is based in Turkey, supported Alibaba's push into retail across national borders. International commerce became a bright spot as inflation and a stronger dollar reshaped consumer demand in many markets.

The business recorded growth in double digits, with revenue rising 32 percent in the December quarter. That compared with 13 percent growth in cloud revenue and 8 percent growth in total sales.

International commerce's growth rate was therefore four times the rate for Alibaba's total revenue, using the reported figures of 32 percent and 8 percent. The comparison shows how quickly that part of the business was expanding relative to the company as a whole.

Alibaba's rebound consequently had more than one source. AI and cloud were central to the new strategy, but international retail delivered the fastest revenue growth among the businesses identified in the results, while domestic commerce remained a management priority.

A larger AI commitment and a warmer political setting

Alibaba had invested in AI for years, including foundational models and custom chips during the COVID period. Foundational models provide a base for AI applications, while custom chips form part of the computing equipment needed to run them. ChatGPT's release in late 2022 prompted management to move faster.

Wu told investors in 2025 that Alibaba would spend more on AI infrastructure over the next three years than it had spent during the previous decade. He also placed artificial general intelligence, or AGI, at the center of the company's mission.

AGI describes the ambition to build AI with broad abilities across different kinds of tasks. The spending commitment makes computing infrastructure a central part of Alibaba's effort to pursue that ambition. No precise spending amount was given in the announcement described here.

Ma reappeared in 2025 at a prominent meeting chaired by Xi, a visible sign of warmer relations between Alibaba and the state. That reassurance mattered because the earlier crackdown had damaged client confidence, and support at senior levels could help the company win back business.

Beijing was also signalling support for private technology companies that build national capabilities. Alibaba positioned itself at the front of China's drive to lead in AI by 2030, linking its corporate recovery to that national goal.

By November 24, 2025, Alibaba's comeback combined stronger revenue, a recovery in market value and a more focused leadership strategy. Its value remained below its earlier peak, but cloud, international commerce and renewed attention to domestic retail had given the recovery several concrete foundations.

Key Points

• Alibaba's December quarter revenue rose 8 percent to 280.2 billion yuan, its fastest growth in more than a year.
• Cloud revenue increased 13 percent to about $4.3 billion, while international commerce revenue grew 32 percent.
• The company regained nearly $100 billion in market value in 2025 but remained below its peak before the crackdown.
• Joe Tsai and Eddie Wu refocused Alibaba on core commerce, cloud computing and AI after its 2023 restructuring.
• Alibaba abandoned its planned cloud separation after new chip export controls made the outlook uncertain.
• Wu said AI infrastructure spending over the next three years would exceed spending during the previous decade.
• Jack Ma's appearance at a meeting chaired by Xi Jinping signalled warmer relations with Beijing.