Alibaba Cloud is targeting $100 billion in combined cloud and AI external revenue within the next five years.

CEO Eddie Wu revealed the goal during Alibaba's Q3 FY2026 earnings call held yesterday, March 19, covering the three months ending December 31, 2025.

Wu noted that the company's Cloud Intelligence Group had grown 35 percent in the quarter year-on-year (YoY), reaching $6.19 billion. Within that, AI-related product revenue delivered "triple-digit year-over-year growth for the 10th consecutive quarter." The previous quarter saw revenue of $5.6bn.

Revenue for the fiscal year so far, through to February, surpassed RMB 100 billion ($14.49bn), and the company now has 92 availability zones across 29 regions, worldwide.

Speaking on the company's five-year goal, Wu said that he "certainly believes" the business will meet it, "if you look at the market growth that we are seeing today, and the strength of our product portfolio, and the roadmap to get there."

A key point executives were keen to draw attention to was the rollout of AI chips by Alibaba's chip company T-Head. As of February 2026, T-Head had "cumulatively shipped" 470,000 AI chips, with more than 60 percent of T-Head chips serving external customers. Alibaba executives also said the company had completed scaled adoption for external customer AI workloads."

While it is not stated which T-Head chips this refers to, Wu conceded to analysts that "our chips still lag behind foreign counterparts in performance in various respects," and the company aims to "engage in more profound co-design with Alibaba's cloud infrastructure and the Qwen model to provide improved cost effectiveness."

Wu also dispelled rumors of Alibaba spinning out T-Head, noting: "It primarily serves to ensure supply chain resilience. In an era of scarce computing power, I see this as crucial to Alibaba's AI strategy. It is possible, and we don't rule out the idea of T-Head considering an IPO in the future, although we currently do not have any definitive timeline."

While much attention is placed on GPUs and AI services in cloud company earnings calls these days, Wu suggested that Alibaba's CPU-based cloud computing could be a strong growth opportunity. He suggested that, in China, there is no more than 10 million IT engineers using traditional cloud computing, but in the future "there could be billions of agents that are created by large AI models and their operating environments."

"The operating environments of these agents will also require substantial support from traditional CPU-centric cloud computing. They need these traditional CPUs as well as databases, storage, and large amounts of memory to support their long-term problem-solving and sustained operations. The challenge lies in transforming the traditional cloud computing market, shifting from a cloud platform designed for human users, those IT engineers, to one that's optimized for agent-based invocation."

Other key metrics for Alibaba this quarter include its company-wide revenue of $40.7bn, up two percent YoY. The company's adjusted EBITDA for the quarter was $4.8bn, up 45 percent, and with a 12 percent margin.

Despite seemingly positive moves for the company's AI business, it failed to meet analyst estimates, and Alibaba's shares fell following the earnings call. According to Bloomberg, its US-listed shares lost $23bn overnight.

Unmentioned during the call was Alibaba's capex plans, though reports suggested earlier this year that the company could be looking to spend up to $69bn over a three-year period, or by February 2028.

Earlier this week, Alibaba revealed it was hiking the prices for many of its cloud services by between five and 34 percent. These increases were put down to a "surge in global demand and rising supply chain costs," but will only apply to services purchased after April 18, 2026.

Alibaba Group restructured earlier this month, shifting all of its major AI businesses under one division managed directly by CEO Eddie Wu.