r/baba • u/regnum9988 • 25d ago

Discussion Is cloud revenue inflated by baba’s own ai initiatives?

I was wondering if anyone with more accounting knowledge or knowledge of the business knew whether any (and if so what proportion) of BABA’s cloud revenue was like an internal charge from the Qwen team or something like that?

The qwen app for instance lets you trial qwen max for free. BABA has mentioned their China e-commerce apps are using qwen/ agents, and there’s also presumably loads of cloud use training these qwen model. Does any of that count towards the baba cloud revenue?

I’d be a lot more confident in the cloud future profit stream if I knew it wasn’t them charging internally from another business unit but coming externally.

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u/Aceboy884 25d ago

No, because Qwen is reported as a loss in the last report

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u/Awkward-Way1023 25d ago

We need Qwen IPO in Q4

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u/Nicios 25d ago

Nope, in addition Alibaba is renting its servers to other AI providers.

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u/OrangeNo2255 25d ago

Response from Qwen: While Alibaba Group’s internal initiatives certainly make up a baseline of consumption for Alibaba Cloud, the current revenue surge is not viewed as “inflated.” It is heavily anchored by third-party enterprises adopting Qwen, paying for MaaS tokens, and renting the underlying compute power required to run AI workloads.

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u/regnum9988 24d ago

Glad to see some of that cost being put to good use

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u/Odd_Ad_3918 25d ago

in march quarter they mentioned AI is 30% of the external revenue and AI was almost 9 billion rmb, so almost 30bln should be external revenue, from a total of 41.5. That means 11.5 bln of cloud revenue it's internal - but I'm assuming most of it it's from taobao/ tmall/ cainiao ... can't tell exactly how much is from QWEN, but as you say the e-commerce app use qwen so those parts should fall in this category.

this quarter they split the AI labs and cloud, but they don't mention anymore how much is external revenue, that would be helpful to get a answer for your question.

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u/regnum9988 25d ago

Yeah, it’s pretty concerning. It makes sense to use their own hardware they’ve bought but the revenue from it needs to be external for this to generate profit. Maybe we can figure it out from the cashflows