en.Wedoany.com Reported - Alibaba Group Chairman Joe Tsai and Chief Executive Officer Eddie Wu jointly issued a shareholder letter on May 20. The letter clearly states that Alibaba's AI business has moved past the initial investment phase and officially entered a commercial return cycle. This follows the same judgment announced by Eddie Wu during the May 13 earnings call, marking Alibaba's reaffirmation, via the shareholder letter, of the arrival of an AI commercialization inflection point.
The shareholder letter approaches the topic from the perspective of industry transformation in the AGI (Artificial General Intelligence) era, proposing that we are currently at a critical turning point for AGI. A vast number of AI agents will undertake an increasing amount of digital work, each driven by model-generated tokens, and will increasingly become the primary interaction interface between humans and the digital world. Against this backdrop, AI models and capabilities are rapidly integrating into various mainstream work and business scenarios, with token consumption climbing swiftly across all industries. The letter assesses that providers of full-stack AI capabilities, represented by Alibaba, could see the addressable market size achieve exponential growth.
Financial data corroborates this judgment. The previously released Q4 Fiscal Year 2026 earnings report on May 13 showed that Alibaba Cloud's external commercialization revenue grew 40% year-over-year, marking the fastest growth rate in nearly nine quarters. The proportion of AI-related product revenue within total cloud external commercialization revenue rose to 30%, with quarterly revenue reaching 8.971 billion yuan, achieving triple-digit year-over-year growth for eleven consecutive quarters. The annualized recurring revenue from AI models and application services surpassed 35.8 billion yuan. During the earnings call, Eddie Wu projected that the revenue share from AI-related products would exceed 50% within the next year, becoming the primary engine for Alibaba Cloud's revenue growth.
The shareholder letter comprehensively elaborates on the latest progress of Alibaba's full-stack AI capabilities. At the AI infrastructure layer, T-Head's self-developed AI chips have achieved large-scale mass production, providing high-quality computing power support for cloud computing infrastructure and the MaaS inference platform. At the foundation model layer, the Qwen large model has undergone stable iterations with versions 3.5, 3.6, and 3.7 over the past three months. The latest generation, Qwen3.7-Max, is newly designed for agents, achieving continuous breakthroughs in core capabilities like programming and reasoning. In terms of specialized models, the open-world model HappyOyster and the multimodal model HappyHorse are simultaneously accelerating their deployment. At the AI application layer, the Qwen App integrates lifestyle, office work, and learning, and has deeply connected with ecosystem applications such as Taobao and Tmall, Fliggy, Amap, and Alipay. The enterprise-grade AI-native work platform "Wukong," targeting the B-end market, is also continuously advancing its large-scale implementation. At the organizational level, Alibaba established the Alibaba Token Hub (ATH) business group in March this year to strengthen strategic synergy among models, MaaS, and AI applications. The number of customers for the MaaS platform "Bailian" has increased eightfold year-over-year.
The shareholder letter states that with its full-stack capabilities across the AI value chain, Alibaba holds a strategic advantage in the new AI era. Leveraging its accumulation of talent, technology, and resources, the group will strive to make AI + Cloud another growth driver for Alibaba. To realize this vision, Alibaba is increasing its investment in full-stack AI capabilities: continuously increasing investment in AI infrastructure construction and self-developed chips; at the model and application level, it will invest in building stronger foundation model capabilities, attract more application integrations, and simultaneously build more powerful MaaS products to connect models and applications more efficiently.
At the 2026 Alibaba Cloud Summit held on the same day, May 20, Alibaba announced the completion of a full-stack Agent-based upgrade covering "Chip—Cloud—Model—Inference," launching T-Head's new generation AI chip Zhenwu M890, the flagship model Qwen3.7-Max, the agent-oriented AI product official website "Qwen Cloud," and a 128-card supernode server equipped with the Zhenwu M890. This series of product releases forms a complete closed loop with the strategic statements in the shareholder letter, confirming Alibaba's sustained investment in the AI + Cloud growth engine.
The shareholder letter also touches upon the strategic direction in the consumer sector, pointing out that instant retail has become the core strategic pillar for the upgrade of the Taobao and Tmall platforms. The announcement also disclosed that the board of directors has approved the distribution of an annual regular cash dividend for the 2026 fiscal year, totaling approximately US$2.5 billion.
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