Alibaba projects annualized AI product revenue will reach $10 billion next quarter. The Cloud Intelligence Group reported 45% year-over-year growth in the June quarter, with AI-related products delivering triple-digit growth for twelve consecutive quarters. Annual recurring revenue for AI model and application services is expected to surpass $1.4 billion in the June quarter and triple to $4.3 billion by year-end. AI products currently account for approximately 30% of external cloud revenue, a share management expects to cross the 50% threshold within roughly one year. Capital expenditures surged 75% to approximately $10 billion, with the vast majority allocated to AI infrastructure and compute capacity.
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