Alibaba is a window into China's 2-speed economy

NO OTHER COMPANY embodies the promises and perils of China’s current growth model quite like Alibaba Group Holding. The technology giant’s most recent quarterly earnings are a textbook illustration of the contradictions of Beijing’s two-speed economy—both strong and shaky at the same time.

- JULIANA LIU

First the good news: Revenue at its flagship cloud division grew at a better-than-expected 34% compared to the year before.

The unit’s contribution to total sales was only 16% in the three months to September, but the proportion has been steadily expanding all year. Home of the popular Qwen AI model, downloaded more than 10 million times since its relaunch last week, brisk growth in this business is a sign that Alibaba’s data-centre bet may be starting to pay off.

Under the spiritual guidance of Jack Ma, now comfortably ensconced at the firm he co-founded following a political rehab, Alibaba has pledged to invest 380 billion yuan ($53.8 billion) over three years on AI infrastructure and technology to establish leadership in the sector. That’s a lot more aggressive than rival Tencent Holdings, with a relatively paltry $1.8 billion in capital investment committed in its latest quarter.