Dear Shareholders,
Fiscal year 2025 marked a year of solid progress as Alibaba Group advanced our “user first, AI-driven” strategy.
This year, we focused on our two core businesses — e-commerce and “AI + Cloud” — which are the twin engines powering our long-term growth. With AI at the heart of our future, we significantly increased investments in cloud computing and AI infrastructure to accelerate innovation and drive the industrial adoption of AI technologies.
We also made disciplined moves to streamline our portfolio, including the divestiture of non-core assets such as Sun Art and Intime. Meanwhile, we steadily improved operating efficiency across our Internet platform businesses. Hujing Digital Media and Entertainment Group and Amap, for instance, each achieved a profitable quarter in fiscal year 2025. As AI unlocks new synergies across our diverse ecosystem, we are adopting a group-wide strategy that optimizes holistic value creation.
In the face of historic opportunities brought by AI, we want to share our forward-looking perspective – our strategic positioning, competitive strengths, and how we intend to capture the next wave of growth.
Strategic Execution and Business Updates
Our first strategic focus, “user first,” continues to guide our Internet platform businesses.
With over 1.1 billion Internet users, China is the world’s largest online retail market, where e-commerce accounts for nearly 27% of total retail consumption. In China commerce, our Taobao and Tmall Group remained focused on user growth and improving user experience. As China’s leading e-commerce platform, we also strengthened the operating environment for merchants, supporting those who offer high-quality products and services. Our efforts to build a sustainable ecosystem that benefits consumers, merchants, and the platform have gained momentum. In fiscal year 2025, we saw a rise in consumer and merchant trust, which in turn fueled business acceleration.
In international commerce, Alibaba International Digital Commerce Group (AIDC) delivered robust revenue growth, driven by the cross-border e-commerce businesses. We enhanced local supply in key markets and diversified our offerings to meet consumer needs across regions worldwide. Operating efficiency continued to improve, and we remain confident in achieving a profitable quarter for our international commerce business in the coming fiscal year.
Our second strategic focus, “AI-driven,” reflects our view of AI as both a core driver of business growth and a transformative force for the future. Over the next decade, AI is expected to reshape every industry. At Alibaba, we are investing aggressively in AI infrastructure and frontier innovation to enhance global competitiveness and generate long-term business momentum.
Alibaba Cloud, our core business that is driven by AI, benefited from surging AI demand. Public cloud revenue accelerated, and revenue from AI-related products posted triple-digit growth for seven straight quarters, pushing overall revenue to double-digit growth for the fiscal year.
In foundation models, we are expanding the frontier of model capabilities while remaining committed to open-source development. In April 2025, we released our next-generation Qwen3 model, which ranked among the top models globally on multiple authoritative benchmarks. As of the end of April 2025, over 200 models in the Qwen family series had been open-sourced, generating more than 300 million global downloads and over 100,000 derivative models, making Qwen the world’s largest open-source model family. These achievements reflect our deep expertise in AI research and will help accelerate the adoption of AI across various industries. We believe our open-source strategy will empower global developers to co-create progress in human intelligence and contribute to the long-term goal of artificial general intelligence (AGI).
Across our broader Internet platform ecosystem, we are expanding the application of AI with an open and forward-looking mindset. We believe AI is not only a catalyst for upgrading existing services but also a key to unlocking entirely new user experiences and value.
Capital Management and Shareholder Return
In fiscal year 2025, Alibaba generated strong cash flow from our core businesses. We improved operating efficiency across multiple platform businesses, strengthening the foundations of previously loss-making businesses, a number of which are now on track to profitability. Our disciplined capital allocation efforts helped unlock shareholder value, including significant capital recovery from the divestment of non-core assets such as Sun Art and Intime. This enables us to double down on our core businesses and invest strategically in AI.
To return value to shareholders, we distributed US$4 billion in annual and special dividends for fiscal year 2024 and have announced a total of US$4.6 billion in dividends for fiscal year 2025. In addition, we repurchased US$11.9 billion of our shares, which resulted in 5.1% net reduction in total outstanding shares, driving accretion in earnings per share.
Looking ahead, we remain committed to enhancing shareholder value through multiple avenues.
Investing for the Future
The rapid evolution of AI is ushering in sweeping changes across industries and, with it, unprecedented growth opportunities for Alibaba.
Over the next decade, AI will be the primary driver of incremental value and transformation. For Alibaba, this means developing world-class AI models, pushing the limits of model capabilities, and building a globally competitive AI-enabled cloud infrastructure. Together, these capabilities will position “AI + Cloud” as our key growth engine for the future.
To realize this vision, we are ramping up investments in three key areas: AI and cloud infrastructure, AI foundation models and native applications, and the AI-driven transformation of our existing businesses. In fiscal year 2025, we announced that our planned investment in cloud and AI infrastructure over the next three years will exceed the total investment made in the past decade.
In this new era, Alibaba is strategically well-positioned. We are a key player in the China cloud computing market and the top cloud services provider in Asia Pacific. Alibaba Cloud is expanding its global cloud computing infrastructure and scaling international deployment of AI-related products to support the globalization of Chinese enterprises. This presents significant growth potential. With our talent, technology and resources, we are confident in capturing these opportunities and building “AI + Cloud” into Alibaba’s second growth curve.
As the AI era begins, Alibaba must embrace a startup mindset — thinking boldly and acting decisively to capture and create new opportunities. As we shared with our team and their families on Alibaba Day, we want to reiterate this message to our investors: creation, not preservation, is in Alibaba’s DNA. Today, Alibaba is embarking on a new chapter in the AI era with the heart of an entrepreneur and the ambition to lead.
Joe Tsai Eddie Wu
Chairman Chief Executive Officer
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