Alibaba Group's cloud computing unit saw revenue growth of 26 percent in its latest quarterly earnings report.

During the company's Q1 2026 earnings call, Alibaba revealed particularly strong growth in its cloud computing unit, driven by increased demand for its AI-related products.

The "Cloud Intelligence Group" saw a total revenue of $4.662 billion, up 26 percent Year-on-Year (YoY). Within that, Alibaba said that AI-related revenue "maintained triple-digit year-over-year growth" - a rate it has maintained now for eight consecutive quarters.

Revenue for the previous quarter was $4.152bn, up 18 percent YoY.

Alibaba's chairman, Eddie Wu, noted that AI revenue accounted for more than 20 percent of revenue from external customers.

Adjusted EBITA margin for the unit remained stable at 8.8 percent.

The rate of growth is particularly impressive in comparison to Alibaba Group's whole-of-company revenue growth, which saw $34.571bn for the quarter, up two percent YoY.

Compared to US hyperscalers, this puts Alibaba in joint second place in terms of cloud growth - with Google Cloud revenue increasing 32 percent YoY in its most recent quarter, Microsoft 26 percent, and Amazon Web Services 17.5 percent.

Among the company's key contracts for the quarter was a deal signed with SAP that would make Alibaba Cloud SAP's global cloud computing partner. Wu said that SAP would use Alibaba's Q1 (Qwen) models to "provide AI transformation services for its enterprise customers." He added: "This partnership signifies the recognition of our cloud infrastructure and AI capabilities by the global leading enterprises in the SAP ecosystem."

The company has remained committed to its previous capex announcement from February of this year to spend $53bn on cloud and AI infrastructure over the next three years. The latest quarter saw Alibaba spend around $5.4bn on cloud and AI infrastructure, and around $14bn over the past four consecutive quarters.

Wu noted on the capex side, however, that "based on the supply chain situation in different quarters, there may be a quarter-to-quarter fluctuation." He added that the change in policies on AI chips and supply could have an impact, but that Alibaba has "backup plans in place to work with various different partners and to be able to respond to different situations in respect of supply chains."

While not explicitly mentioned, the quarterly results coincided with reports that Alibaba has developed a new AI inference chip. The chip is said to have been manufactured by a Chinese company and is now in testing. It follows a 2019 inference chip developed by Alibaba, which was manufactured by TSMC prior to the US government blocking the company from working on chips for Chinese companies.

Other recent developments for Alibaba's cloud unit include the launch of a third data center in Malaysia and another in South Korea, as well as cloud migrations by GoTo Group and World Aquatics.

Following the earnings call, Alibaba shares rose by 19 percent.