Tencent and Alibaba announce dividends after earnings, will SMIC and Hua Hong carry the baton next?

業績會第一現場

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阿里巴巴2026財年Q4業績直播（即時傳譯）

Key Takeaways (AI-Generated)

Financial Performance:

- Alibaba reported a year-over-year revenue growth of 11% to RMB 243.4 billion.

- Gross margin gains in quick commerce and cloud services were highlighted.

- GAAP net income surged by 96% to RMB 23.5 billion, largely driven by mark-to-market changes in equity investments.

- Operating cash flow was positive at RMB 9.4 billion, although free cash flow showed an outflow of RMB 17.3 billion.

Business Progress:

- Significant advancements were made in AI and cloud, with AI-related product revenues now accounting for 30% of the Cloud Intelligence Group's external revenue.

- Customer management revenue (CMR) and quick commerce showed strong performances, with CMR increasing by 8% year-over-year and quick commerce up 57%.

- AI-driven infrastructure, including T-Head's proprietary GPU chips, positioned Alibaba as a leader in delivering AI cloud services with self-developed AI chips at scale.

- Introduction of the Qwen app, integrating various Alibaba services, represents a strategic push towards further consumer engagement and efficiency.

Opportunities:

- The growing adoption of AI and cloud technologies presents a significant growth opportunity, especially as AI-related product revenue is projected to constitute over 50% of the Cloud Intelligence Group's revenue within the next year.

- Expansion of AI infrastructure and proprietary cloud products can enhance Alibaba's competitive edge and market leadership.

- Rapidly improving AI application services and the ongoing integration into consumer and enterprise operations open new revenue streams.

Next Quarter Guidance:

- Expected continued acceleration in Cloud Intelligence Group's revenue growth beyond the 40% observed.

- Focus on enhancing AI and cloud offerings to drive further revenue growth and margin improvements.

- Projected increase in annualized recurring revenue (ARR) for model and application services to surpass RMB 30 billion by year-end.

Risks:

- Heavy investments in AI and cloud technologies could continue to strain free cash flows, although projected narrowing losses in quick commerce and improved performance of AIDC may offset impacts.

- Dependency on the broader adoption and integration of new AI technologies poses potential risks tied to market reception and competitive pressures.

Full Transcript (AI-Generated)

Operator

Ladies and gentlemen, thank you for standing by. Welcome to Alibaba Group's March Quarter and Full Fiscal Year 2026 Results Conference call. At this time, all participants are in listen only mode. After management's prepared remarks, there will be a Q and A session. I would now like to turn the call over to Lydia Lu, Head of Investor Relations of Alibaba. Please go ahead.

Lydia Lu

Good day, everyone. Thank you for joining Alibaba Group's March quarter and full fiscal year 2026 earnings call. On the call with me are Joe Tsai, Chairman, Eddie Wu, Chief Executive Officer, Toby Xu, Chief Financial Officer, Jiang Fan, Chief Executive Officer of Alibaba e-commerce Business Group. As a reminder, this call is being webcast live. A replay of the call will be available on our website later today.

On this call, we may make forward-looking statements and discuss certain non GAAP financial measures. The forward-looking statements reflect management's current expectations that are subject to risks and uncertainties. Our GAAP results and reconciliations of GAAP to non GAAP measures is included in today's earnings press release and investor presentation. Our comments will be on year over year comparisons unless we state otherwise. And with that, let me turn the call over to Eddie.

Yongming Wu

各位投资人朋友 Welcome to Alibaba Groups fiscal year 2026 fourth quarter earnings call. Over the past quarter, Alibaba high intensity investment in our two strategic priorities of AI plus cloud and consumption is rapidly translating into tangible business results with group revenue growing 11% year over year.

This quarter cloud intelligence groups external revenue growth accelerated to 40% and AI related product revenue achieved triple digit growth for the 11th consecutive quarter. China e-commerce CMR grew 8% year over year on a like for like basis and the quick commerce market achieved significant unit economics improvement while maintaining market share.

We are at a pivotal inflection point in the evolution from conversational chat bots to autonomous AI agents, which is directly driving explosive growth across our across 3 core workload categories, training, inference and agent orchestration. Against this backdrop, Alibaba's AI has moved beyond the initial investment phase and progressed commercialization at scale.

Next, let me walk you through 4 areas in detail. AI commercialization, cloud infrastructure, the AI application ecosystem and our consumption business. First, the AI and cloud commercialization inflection point has arrived. This quarter, Cloud Intelligence Groups annualized AI related product revenue has surpassed RMB 35.8 billion, continuing to maintain triple digit growth.

AI related product revenue now accounts for 30% of Cloud Intelligence Groups external revenue. We expect that in about one year, AI related product revenue will cross the 50% threshold becoming the primary engine driving the cloud business's revenue growth. As a result, Cloud Intelligence Groups external revenue growth is expected to continue accelerating beyond its current 40% rate over the coming quarters.

Given the certainty of long term AI demand and our full stack technology advantages, we expect this trajectory to sustain strong growth over the medium to long term. This reflects AI's role in driving a comprehensive upgrade of Alibaba Cloud's entire business as its growth engine fully pivots from traditional compute and storage to models AI compute and agent services.

We're also seeing exponential growth in AI model and application services revenue, a new revenue engine driven jointly by Foundation Model services and AI native software. Over the past three months. Token consumption volumes on our Model Services platform grew substantially quarter over quarter as enterprise customers accelerated their shift from simple tasks to production scale and complex workloads, driving continued growth and demand for model and application services on the Model Studio platform.

We expect model and application services annualized recurring revenue ARR inclusive of the model studio platform to surpass RMB 10 billion in the June quarter and RMB 30 billion by year end. The high margin profile of this revenue stream is becoming increasingly apparent, making it a source of healthy high quality growth.

2nd, our AI infrastructure underpins our full technology stack and constitutes A durable Moat T heads. Proprietary GPU chips have achieved scaled mass production with over 60% of compute capacity already serving external customers across Internet, financial services and autonomous driving verticals.

As the only AI cloud provider in China capable of delivering self developed AI chips at scale, we've secured autonomy over our compute supply chain while providing customers with highly competitive AI inference and training services in an environment of compute scarcity. This structural advantage is favorable to our revenue growth and gross margin improvement.

At the same time, our cloud products are accelerating their AI oriented upgrade. The surge in agent workloads has significantly elevated demand for traditional cloud products built around CPU, storage and containers, and we're upgrading these into infrastructure solutions optimized for the agent era.

Third, at the application layer, we've built a complete closed loop spanning AI native software to a full agent ecosystem. Alibaba Token Hub Ath continues to launch new products connecting consumer and enterprise environments with breakthrough progress in AI native software and coding agents. The Q1 model continues to iterate across reasoning, coding and agentic capabilities.

On the enterprise side, we've launched a range of products spanning intelligent workplace tools, AI coding and business operations management, helping enterprises unlock greater productivity. On the consumer side, the Qwen App fully integrated Taobao and Tmall's commerce service capabilities on May the 7th. And with this, Qwen app is now deeply embedded across the ecosystem spanning Taobao, Alipay, Amap and Fliggy, making it China's first all in one personal assistant to seamlessly bridge everyday life productivity and learning.

Fourth, across our consumption business and at the group level, we're prioritizing long-term value. Beyond AI, our consumption strategy continues to progress steadily with CMR growth rebounding significantly this quarter. CMR grew 8% year over year on a like for like basis as we continue to improve user experience and merchant operating efficiency. The quick commerce business achieved significant unit economics improvement while maintaining stable market scale.

In summary, the return on our investments in AI plus cloud and consumption are increasingly clear. AI plus cloud revenue growth is accelerating with improving margins model and application services ARR continues to grow at pace and operating efficiency across our consumption business continues to improve.

Facing the historical opportunity that AI represents, Alibaba is at a pivotal juncture where our technology investments are beginning to pay off commercially, will maintain our strategic resolve and leverage our full stack AI capabilities to support long term growth. That concludes my prepared remarks. Next, I'll hand over to Toby to walk you through our financial results.

Toby Xu

Thank you, Eddie. Our strategic priorities remain laser focused on on AI plus cloud and consumption businesses. Multiple growth catalysts, including technological advancement and Business Innovation are aligning to create strong tailwinds on AI plus cloud, our full stack capabilities, span models, cloud infrastructure and applications with established leadership in every layer.

The strong growth of our AI plus cloud businesses and the clear path to monetization of our MaaS platform give us confidence to make significant investments to extend our leadership. On consumption, we achieved a strong CMR growth on a like for like basis during the quarter. In our quick commerce business continued to improve UE and AOV quarter over quarter.

Now let's look at the financial results for this quarter. On consolidated basis, total revenue was RMB 243.4 billion, excluding revenue from Sun Art and Intime, revenue on like for like basis would have grown by 11%. Total Adjusted EBITA decreased 84%, primarily due to our strategic investments in technology businesses, quick commerce and user experience, partly offset by the improved operating results supported by continued growth in consumer management, service and cloud business and enhanced operating efficiencies across various businesses.

Our GAAP net income was RMB 23.5 billion, an increase of 96%, primarily attributable to the year over year increase in net gain from mark to market changes of our equity investments and disposal losses of Sun Art and Intime in the same quarter last year, partly offset by the decrease in Adjusted EBITA.

Operating cash flow was an inflow. Of RMB 9.4 billion, free cash flow was an outflow of RMB 17.3 billion. We are reinvesting. Our operating cash flow to enhance our competitive advantage in AI. As of March 31st, 2026, we held approximately U.S. dollar 38 billion in net cash. Excluding debt with maturities beyond five years, our net cash position stands at approximately U.S. dollar 59 billion. This balance sheet strength gives us confidence to invest for growth.

Now let's look at our consumption businesses. Revenue from China e-commerce Group was RMB 122 billion, an increase of 6%. Customer management revenue increased by 1%. To help merchants grow their businesses and increase willingness to spend our platform, we upgraded our business development program for select merchants during the quarter, under which the level of platform subsidies for these merchants is directly tied to their marketing spend on our platform for accounting purpose.

Such subsidies previously recorded as sales and marketing expenses are now recorded as a contra revenue item to CMR. Accordingly, CMR grew 1% year over year during the quarter. Excluding the contra revenue impact from the program on a like for like basis, CMR would have grown 8% year over year.

Revenue from our Quickcommerce business increased 57% to RMB 20 billion. The Quickcommerce business further improved the UE and increased the AOV quarter over quarter, primarily driven by order mix optimization. Alibaba China E-commerce Group Adjusted EBITA was RMB 24 billion, a decrease of 40% primarily due to the investment in Quickcommerce user experience and technology, while there's positive contribution from customer management service excluding loss from our Quickcommerce business, our Alibaba China E-commerce Group EBITA.

Would have been stable year over year and will fluctuate quarter over. Quarter due to significant investment in merchant retention and the user experience, revenue from AIDC grew 6% this quarter. AIDC's Adjusted EBITA loss narrowed significantly year over year approaching break even driven by a combination of logistics optimization and operating efficiency. The unit economics of Aliexpress's Choice business continue to improve substantially on sequential basis.

Next, let's look at the business updates and results of Cloud Intelligence Group. Our cloud business delivered another quarter of accelerating growth. Revenue from external customers accelerated to grow 40%. AI related products continue to lead this momentum. We delivered our 11th consecutive quarter of triple digit growth in AI revenue. Its share of external cloud revenue continue to increase, now account for 30%.

This quarter's AI revenue is RMB 9 billion and the annual revenue run rate is RMB 36 billion or U.S. dollar 5.3 billion. This is a clear reflection of the scale and acceleration in our AI business. The Adjusted EBITA margin remained relatively stable at 9.1%.

All other segment revenue decreased by 21% to RMB 65.5 billion, mainly due to the disposal of Sun Art and Intime businesses as well as the decrease in revenue from Cainiao, partially offset by the increase in revenue from Freshippo and Amap. All others Adjusted EBITA was a loss of RMB 21.2 billion, primarily due to the increased investment in technology businesses, including foundation models and the consumer facing Qwen APP.

As we close this fiscal year, we remain committed to delivering consistent shareholder returns. Our Board of Directors has approved an annual dividend of U.S. dollar 1.05 per ADS. We will continue to invest decisively in AI and consumption businesses where we see significant long term growth potential in Our competitive advantages are compounding. We believe these investments to deliver growth and returns over time, ultimately creating greater value for our shareholders. Thank you. We will now open for Q&A.

Lydia Lu

Hi everyone. You're welcome to ask questions in Chinese or English if third party translator will provide consecutive interpretation. In the case of any discrepancy, our management statement in the original language will prevail. 好，欢迎提问我们有第三方工作人员提供实时中英文交替传译如有任何疑义，请以管理层原始语言所做的陈述为准 operator Please start QA session.

Thank you. If you wish to ask a question, please press *1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press *2. If you're on a speakerphone, please pick up the handset to ask your question. To give people the opportunity to ask questions, please keep yourself to no more than one question at a time. Your first question comes from Ronald Keung with Goldman Sachs.

Ronald Keung

Thank you, Joe, Eddie, Toby Fan and Lydia and thanks for sharing the very sizable AI MaaS and applications ARR scale and the target for the first time. So I just want to ask how much of that ARR is driven by our in house models like Qwen versus third party models and given the recent token price hikes, what would be the implications to MaaS and also our cloud margins as a result? Thank you.

啊，感谢周Eddy 呃，托比蒋凡和Lydia 也感谢你们刚才分享啊在AI MaaS 这方面啊，呃，实现的呃，很大的一个规模，还有应用方面的规模呃，那我想啊，问一下你刚才讲到这个arr 呃，其中这个增长啊，多大程度上是我们内部资源模型像千问这样呃带动的，而呃，多少是第三方模型，然后另外考虑到最近呃token 这个价格是提高了的那么对MaaS 以及云的呃，利润率会有什么影响谢谢

Unknown Executive

好，谢谢您的问题啊嗯，在我们的现在，我们因为这个季度我们刚刚公布了一个最新的一个数字也就是我们的呃模型及应用模型及应用服务收入这个收入的主要的业务，现在就现在而言，主要的业务构成其实分成两个部分就是我们的百炼的MaaS 的API 服务以及我们的AI 原生软件的订阅值的这些这些收入

那么在现在这两部分的收入里面，绝大部分都是还是来自于百炼的MaaS 的API 服务但同时阿里云的百炼其实又是一个相对开放的一个平台在我们这个平台上，我们hosting 自研的模型也会hosting 三方的开源模型包括三方的闭源模型那就现在我们的收入规模上来说，绝大部分还是我们的自研模型包括我们的千问积模，以及包括我们的语音模型包括我们的视频模型

Thank you for that question. This quarter marks the first time that we announced this, the latest figure for model and application service revenue that really comprises mainly 2 things. On the one hand, it includes revenue from API calls on MaaS on our Bailian platform and it also includes revenues from our AI software subscriptions.

At present, most of the revenue is coming from the first of those two pieces, but this is an open platform, so we are providing access both to our proprietary models as well as third party models, including open source models and closed models. But for the time being, most of that revenue is coming from our own proprietary models including Qwen as well as Tmall, as well as our voice and video generating models.

其实也是比较关键的一个问题，因为最近最近这个一个季度我最近这几个月来发生一个非常大的整个行业发生了一个非常大的改变，就是因为整个的AI 在从对话式的chatbot 转向agentic 的运行 agentic 运行需要帮助客户完成非常复杂的推理任务那在这个最导致于客户的对于模型的推理的这个需求持持续直线的直线的上升

那在这个过程当中，由于可以帮助客户完成更复杂的工作任务所以整个API token 的价格也客户的接受度其实虽然价格进行了上调，但是客户的接受度其实还是还是非常高而且需求也是非常持续的大而且在这个需求就现在来看，我们实际是我们的供应其实还没有办法完全的满足这些客户的需求排队的客户还有很多，所以就就现在这个情况下我们觉得首先MaaS 业务它也本身的一个对比 IaaS 业务来说，相对毛利就会天然就会高一些

然后然后还有一些还有几个比较重要的一些点吧第第一个点就是说整个推理的技术的技术的这个发展还在持续的发展在这个所以每个季度我们都会看到在推理技术上的一些优化带来的成果可以使我们在单服务器单卡的token 产能上面产生一些持续的持续的增量效果同时由于模型的能力也在持续的加强而且模型的价格在未来的一年一两年内，我们看到持续的应该还是会是一个价格提升的一个过程所以从从这个角度来看，我觉得我们未来这几季度因为MaaS 业务的这个飞速增长，会对我们的毛利率产生一些非常非常积极的非常积极的影响

Your second question was also a really important one because in the past quarter, over the past few months, we've seen a very large shift in the market where AI is shifting from functioning as a conversational chatbot to providing agentic capabilities of these agents are increasingly capable of solving for very complex problems, meaning that they need to do a lot more inferencing than in the past.

And precisely because these agents can help to solve very complex tasks, customers acceptance for higher prices and we have increased per token prices is is good and the demand continues to to be high and growing. In fact, our ability to supply this demand is not able to keep up with all the growth and demand. And we actually have a lot of customers still waiting to access the service.

Inherently, MaaS will have higher gross margin than IaaS. That's important to know. And I can also add a few important points on top of that. First is that the development of reasoning or inferencing technology still continues to advance. So every quarter we're seeing new results in terms of optimization, in reasoning, in inferencing with continuous incremental effects in terms of the token capacity of a single server and a single card.

At the same time, as the capabilities of models continue to strengthen and price of the models continues to increase in the next year or two, we see that this should be a process of continued price improvement. So I I think from this point of view, the rapid growth in this business over the next few quarters will result in a very positive impact on our overall gross profit margin.

Operator

Your next question comes from Kenneth Fong with UBS.

Kenneth Fong

Hi, good evening management. Thanks for taking my questions and Congrats on the very strong progress on the AI. I have a question regarding the return on invested capital on the AI investment. So while our AI investment have driven impressive 40% cloud growth, they have also created significant drag on the group free cash flow as well as our EBITA. So how should investor assess the return on this investment and what's the management framework for balancing the aggressive AI spending versus earnings stability? Thank you.

啊，好，非常感谢管理层接受我的问题，也祝贺你们在AI 领域取得的啊非常好的这个业绩啊我的问题呢是关于AI 领域，我们这个资本啊投资的回报率这一方面，我们看到这种投资啊呃，使我们得以实现啊，40%的啊，云业务的呃增长这个非常好那同时呢对于集团的这个自由现金流以及EBITA 呃，带来了一定的这个拖累，呃，效果那么我想知道集团如何评价啊，这个投资的呃，回报率啊，然后你们呃，采用什么样的管理框架来平衡啊就是一方面是AI 投入，另一方面是啊公司的这个呃，营收能力怎么平衡

Toby Xu

OK，那谢谢你的问题啊我想我先来这个回答第一部分，因为我觉得大家可能现在特别是这个季度看到我们的这个自由现金流是一个负数，所以大家可能会比较关心我们是怎么来控我们这这个自由现金流的我想首先大家可以看得到这样一个自由现金流的负数最关键的还是我们在过去一年的在AI 方面的投入那正是因为我们看到了这样一个历史的一个机遇我们是十分坚定的在这这个方面进行这样的一个投入所以这是最主要造成的一个这个整体的一个自由现金流为负的这样一个情况

Thanks, Kenneth for that question. This is Toby and I'm going to start by answering that first question because I think it's a important and of interest to everybody. The the question is the reason for the negative free cash flow and how we are managing that. So starting there, the answer is that the negative free cash flow is primarily due to the very significant investments we've been making in AI over the past year. And we've been extremely resolute in making those investments precisely because we've seen the historic opportunity of AI.

往未来再看两年的话，我想我们的这个样，一个投入还是会继续的十分的坚定，因为这样一个窗口期可能对我们来讲就是几年的时间所以在投入的角度，我们会继续很坚定，同时回来再看从我们经营现金流的角度，其实并没有这个有大的一个一个变化这里我想谈两个方面啊，第一个方面，从从我们消费业务的角度淘宝天猫作为我们最重要的一个现金流，呃经营现金流的产生的这样一个业务，这个整个经营现金流的产生还是十分稳定的

而未来两年，随着整体的我们闪购的这个相会呃，相对的这个亏损的，呃，大幅的收窄整体的消费业务会加上我们还有一个aidc 的整体的从一个亏损往盈利的方向走整体的消费业务的在未来两年来看，整体的现金流经营现金流会是十分的一个正向的一个发展所以这是第一个我想说的

So we've been very resolute in making those investments over the past year and looking forward to the next two years, we intend to be equally resolute in continuing these investments again because we see this as a critical window of opportunity that will be open for that. For the next couple of years additionally, there's really been no big change in the way that we we look at cash flow.

First of all, the major contributor of operating cash flow for the group is Taobao and Tmall and that cash flow is very stable. And looking ahead over the next two years in terms of quick commerce, the losses will narrow very substantially. At the same time, AIDC will develop from making a loss to being profitable. So we see these developments over the next two years as being highly positive for our net cash flow.

第二点另外一个很重要的一点是，这个我们在云的这样一个基础设施的投资刚才那个Eddie 也提到了，会让我们的整个的云的收入AI 云的收入继续加速同时整个的毛利率的改善，所有这些会进一步提升我们在云这个板块的经营现金流回来同样可以这个支撑我们对这个呃呃云的基础设施的投入第三点我也想说我刚才提到了我们自己的整个的balance sheet还是十分strong 的我目前的净现金差不多38亿美金，如果我们呃拿掉这个五年以上到期的债务的话，我们现在净现金大概有差不多59亿美金所以这样一个资十分，这个坚实的这样一个资产负债表也可以很好的支持我们的对这样一个这个云的基础设施的投入

最后我还想说是我们还有很强的资本市场的融融资能力可以通过不同的形式的市场融资去应对战略发展的需要所以我我这里我想先回应一下，呃，您刚才提到的关于现金流包括我们怎么样这个这个准备好更充足的现金流这个问题然后接下来看那个呃Eddie是不是有一些补充

Another important point to be added is that our ongoing investments in cloud infrastructure will increase the revenues that we can achieve from our AI and cloud offerings. At the same time, we will increase gross margins in those very same offerings. So in those ways, we expect that we can achieve higher net cash flow from our cloud and AI business and that cash flow can in turn be used to support the development of the relevant infrastructure.

An additional point is that we have a very strong balance sheet. As of March 31st, 2026, we held approximately 38 billion U.S. dollars in net cash. And if you exclude debt with maturities beyond five years, our net cash position stands at approximately 59 billion U.S. dollars. So that balance sheet strength also gives us confidence to reinvest for growth.

And beyond that, I would also add that we have a very strong capacity for pursuing financing in capital markets and we have the capability to raise capital from the markets as we need to support our development. So I wanted to open with that in response to your question on cash flows and I'll pause there to see if Eddie has anything to add.

Yongming Wu

好，您说的关于AI AI 方面的这个投资的以及未来的这个这方面的情况我觉得可以也借此这个机会分享一些我们的一个看法吧就是从从现在整个AI 的业务的发展趋势来看我觉得AI 更像一个制造业也就是说，当我们要获得更多的收入的时候我们其实要必须要去建立两个核心的工厂这两个核心工厂的规模会影影响着我们未来有多大的一个收入规模这两个核心工厂一个我们可以成为叫做AI 的训练工厂一个叫做AI 的推理工厂，那这两个工厂背后其实是一个AI 的数据中心的建设

而数据中心的这个建设我相信一定会消耗比较大的集团的自由现金流但是这些刚性的数据中心的这个这些基础设施的建设我们在回报的路径上是非常清晰的就是当我们这些数据中心，我们在to B 的to to B 的这个商业化这个路径上是非常清晰的无论是云的IaaS的这种商业化的服务，还是通过我们的MaaS 平台以及通过我们的AI 原生软件去创造更多的模型之上的这这样的，这个营收我们几乎现在在我们的服务器内几乎没有一张卡是空的也就是现在我觉得在未来三到五年内的这个需求的情况下我们大量的投入的AI 数据中心的建设，这个投资回报是非常确定的

Thank you. You asked about our investments in AI and the ROI on those investments going forward. So on top of what Toby has already said, I'd like to add a few notes regarding where we're heading. I think the best analogy is manufacturing. In other words, in order to be able to manufacture more and sell more in the future and achieve more revenue, what we're doing today is investing capital to build 2 factories, if you like.

The first, we can call the AI training factory. The second, we can call the inferencing factory. And both of those factories need to be powered by our AI data centers and that requires the investment of cash flow today. However, looking to the future, the pathway to achieving solid return on investment in those factories in those areas is very clear on the 2B side by monetizing our 2B offerings, including our cloud based IaaS as well as MaaS of course and our AI native apps.

And I can tell you that today there isn't a single card on our servers that is idle. So we see the ROI on this investment in the next three to five year period as being extremely clear.

Operator

Your next question comes from Thomas Chong with Jefferies.

Thomas Chong

Hi, good evening. Thanks management for taking my question. My question is on quick Commerce. We've talked about the improvement in UE in the prepared remarks. I just want to get some more color about the drivers behind in terms of AOV subsidies ratio, fulfillment ratio, et cetera. And on top of that, I remember last time we talked about the outlook for quick commerce over the next couple of years. Is there any update or changes in terms of how we think about the landscape or the UE in the next three years? Thank you.

好感谢，呃，管理层，呃，我的问题是关于即时零售呃，这一方面，那么刚才在准备好的发言当中你们已经介绍了UE得到了呃显著的改善，我想呃，了解一下背后的呃，呃，驱动因素啊，呃，包括这个呃，是比单价呃还是呃，补贴比率还是履约等等各方面的一个贡献另外的话，呃，上一季度的，呃，业绩发布会上你们呃介绍了，呃，未来两年的这样一个即时零售的展望那么想知道，呃，从那个时候到现在，你们这种展望有什么样的新的变化你们看待市场格局的呃，方式有什么样的呃变化，包括这个呃呃，UE 方面和补贴等方面

Unknown Executive

我来回答一下这个问题对，首先经过一年的投入，我们看到即时零售业务飞速发展我们的市场份额取得了根本性的变化，那么对比这个呃，三月季度，去年三月季度同期就大规模的投入之前今年我们的订单规模跟市场份额都取得了显著的提升呃，那么一到三月份整体订单规模是去年同期的2.7倍那么其中非餐饮零售部分是去年的三倍那么四月份以来，我们在保持订单规模的同时我们继续通过物流效率的提升，订单结构的优化尤其是这个AOV的这个进一步上涨那么它推动了我们的UE显著的优化，那么我们有信心在新财年结束前实现UE转正

Thank you. Well, first, as a result of our strong investments in quick commerce, we've achieved very rapid growth in quick commerce over the past year, marking a very fundamental shift in our market position. Compared to the same quarter last year, which was of course prior to all this large scale investment, both our order volume and our market share have increased significantly.

Overall order volume was 2.7 times that of the same quarter last year with non food orders at three times from April onwards. While maintaining order volume, we've continued to drive substantial improvement in UE through enhanced fulfillment logistics efficiency as well as order mix optimization. So we are confident that UE will turn positive by the end of fiscal year 27.

在这个呃优化UE的同时，呃，我们后续还是会持续通过创新呃，提升用户商家体验保持我们在即时零售领域的长期竞争力所以我们有信心在新的规模跟市场份额水这个水位下未来实现即时零售的整体盈利那么本季度我们也看到闪购对实物电商的促进尤其是在新客获取促进用户活跃度，满足用户多元化消费场景拉动成交跟商业化以及物流基建等方面那么推动淘天整体板块发展

我们继续看到闪购相关品类的带动明显，特别是食品生鲜等品类那么也继续推动像盒马天猫超市等即时零售相关业务的发展那么我们的实物电商，呃，这个季度无论在成交跟cmr 方面这个就都取得了比较好的一个增长的势头，那么闪购跟即时零售我们也看到在里面起到了非常确定性的正面拉动作用

While optimizing UE, we will continue to innovate to improve the experience for both consumers and merchants, thereby sustaining our long term competitiveness in quick commerce. We're confident that our Quick Commerce business will achieve overall profitability in the future at new scale and market share.

This quarter, Quick Commerce continued to generate synergies with our conventional e-commerce business as demonstrated in driving customer acquisition, enhancing user engagement, fulfilling diverse consumer demands, increasing transactions, improving monetization and supporting logistics infrastructure. In terms of categories, Quick Commerce continue to drive sales in various categories, especially food and fresh produce and healthcare and contributed to Freshippo and Tmall Supermarket's accelerated growth.

So in our conventional e-commerce business, we saw GMV and CMR demonstrate strong growth momentum in the March quarter and Quick Commerce played a vital role in driving that performance.

Operator

Your next question comes from Jialong Shi with Nomura.

Jialong Shi

啊，好的，晚上好管理层，非常感谢接受我的提问啊，我想追问一下就是之前管呃在那个在opening remark 管理层说到的那个MaaS MaaS 这个业务啊我就是想了解一下，就是管理层怎么看在MaaS 领域，阿里巴巴和中国其他头部的AI 平台公司以及AI 创业公司的优势是什么我们在美国看到这个AI agent，尤其是AI coding 已经是AI 商业化增速最快的领域所以想问一下，在中国您估计AI coding 大概什么时候什么时候会看到类似的增增速另外就是中国企业好像一直不愿意为SaaS 产品付费您觉得这个会不会让中国的这个AI coding 产品的商业化前景没有美国同行那么有潜力谢谢

Good evening management for taking my question. I have a follow up based on your opening remarks concerning MaaS. I'm wondering first of all, what is, what are the major advantages that Alibaba has when compared to the other major AI platforms in China as well as Chinese AI startups in the United States? We see that AI agents and especially coding are the the fastest growth track in in AI. I'm wondering when you think we'll see that kind of growth in China in terms of AI coding. We also know that Chinese customers are less willing than US customers to pay for SaaS. So do you think that that will that means that the future commercialization of Chinese AI coding products might have less potential than we see with the US counterparts?

Unknown Executive

好，呃，谢谢您的问题啊，就是你这个问题也问问的很好就是在阿里云的百炼这个平台上，我们其实是是定位是一个开放性的一个AI 推理平台，那在这个推理平台上现在主要的一个营收确实主要是由由我们自研的模型产生的那我觉得对比一下这些我们的AI 创业公司而言就是像我们这个在模型上面的投入和广度来说其实是我们会远远超过这些模型创业公司当然这些模型创业公司在专注于某一个模型或者某一个领域来说他们也有非常强的技术，以及很快的，呃，很快的商业商业敏锐度所以他们的进展也是很快

所以从这个角度上来说我们如果单纯在看MaaS 领域的话嗯我觉得这些创业公司某种程度上也是也是阿里云的也是阿里云的合作伙伴所以那但是对阿里巴巴而言，我们会会更强调我们在各个各种不同领域的模型要做更广度的研发，也就是我们会做，嗯，像基于coding 能力为优先的千问基座模型像我们的视频模型，无论是万象还是我们的happy horse 包括更面向未来的世界模型，包括我们的语音模型而我们相信，未来在很多的业务场景上面，用户会需要多种不同的模型能力综合来满足他的一些业务需求所以这个是我觉得我们呃，与这些头部的这AI 创业公司的相比的一个区别同时和他们其实某种程度上也是阿里云百炼的合作伙伴

Thank you. Well, the way we define our MaaS platform Bailian Model Studio is as an open AI inferencing platform. Certainly at present the majority of Bailian's revenue is driven by our own proprietary models. But you know, in, in contrast to the AI startups in China, I think that we are are investing at a much higher scale and across a much broader range of different model types.

In contrast, those startups may tend to focus on a very narrow particular vertical segment and they can move rapidly ahead with that kind of focus. You know, and strictly in terms of our our MaaS business, I think those AI startups really are partners rather than competitors. But in Alibaba, we particularly place emphasis on our model capabilities and developing them across all different spaces and all verticals to serve a very broad and diverse set of needs, including our our coding model capabilities, including image based models. So both on Wanxiang and HappyHorse as well as these new world models and of course, of course voice models as well.

So we, we aim to provide all different kinds of models to meet all different kinds of needs. And this is different, I think, from those startups. And at the same time, those startups are our partners.

好，呃，您说的关于AI coding 这个问题也很好就是其实您说何时能迎来类似的增速，其实我觉得我们的判断是在中国就现在已经迎来了类似的增速也就是从我们自己在百炼平台上看到的趋势以及行业内其他的像这些和我们合作关系比较友好的这些AI 创业公司那边看到其实从去年11十二月份开始到现在，到今年的五月份这一段时间的大量的公司的API 需求的一个增长几乎大部分都是由AI coding 的能力的提升来带来的

而AI coding，它不是简单的，只是说我们替代了软件工程师的工作由于AI 模型的能力的提升，以及AI coding 和整个的agentic 的运行环境的这些结合也就是所谓的哈尼斯工程啊这些数据领域的这些结合，我们看到由AI coding 去驱动的复杂任务 agentic 已经可以，几乎可以在各个数字化的工作任务当中去完成任务那所以这一无论是美国还是中国，这一波AI 需求的带来的带来的增速主要是靠的是AI coding 能力的提升平因为你能力的提升，结合电脑或者数字化的这些工具场景理论上是可以解决几乎所有数字化工作的未来未来的这些复杂任务所以这个是一个整个的，我们觉得未来两到三年内一个非常重要的一个一个增长，一个增长趋势吧

The whole with that, OK. The other part of your question was about when we can see the similar kind of growth in China as is being witnessed in the US around AI coding. And I would say in terms of what we're seeing based on the trends that we are still seeing on Bailian as well as the experience of some of these AI startups in China who work closely with us, you know, I would say China is, is already there.

Most of the growth that we're seeing in utilization from say November or December of last year through to May of this year has been driven by capability upgrades in terms of coding and and these models are not just able to replace software engineers basically they're able to solve a wide array of very complex tasks beyond just coding per se in any kind of digitalized productivity scenario.

So you know, we've seen AI coding capabilities improve significantly in both the US and in China. And these capabilities are are capable of supporting much more than just a coding per se. It can address a whole wide range of very complex tasks in the workplace insofar as those tasks can be digitalized. So looking ahead to the next two to three years, we see this is a very, very important growth driver.

哦，其实我们看到您说的关于说中国长期企业存在上市付费意愿较低的问题那我觉得在现在这个大模型的这个时代，有一个非常大的区别就是现在的AI 的模型的能力越来越强，当它可以帮助这帮助这些用户真正的完成工作当中的复杂的任务的时候我们看到无论是美国的企业还是中国的企业，对于位于为他帮助他完成工作任务帮助会为这个智能能力买单这个这个需求在美国和中国都是一样的，而且都会非常强

理论呢上来说，只要帮助他完成的这个工作任务在他的企业内，这部分工作任务创造的价值大于token 的成本某种程度上，这个对于API 的token 的需求就会是无限的所以从这个角度上来说我们也看到底层的对于AI 的这个需求的增长还是会非常长期确定性，那从我们自己看到的也可以分享一下我们自己看到的一些数据那我们在我们的百炼平台上看到的整体的增速非常非常之快对比去年11十二月份的数据，那我们今年五六月份的数据我们应该会增长增长十倍以上而且就是在最近我们其实的我们其实的ARR 应该已经突破了80亿那也就是说在这个季度我们突破100亿的ARR 是一个非常确定性的事情所以我们看到无论是中国企业还是美国企业对愿意为智能能力买单，愿意为通过这个智能能力调用这个智能能力帮助他完成真实的工作任务，这个这个事情买单是一个非常普适性的一个选择

On your other comment, you know, we we have also taken note of the lower willingness in China to pay for SaaS. However, I think that is poised to change as the models become increasingly powerful and are able to truly solve for very complex tasks, very complex problems as they are providing truly valuable intelligence.

You know, I think we we can expect to see the same demand for that kind of service in China as in the US You know, in a certain sense when the value provided by tokens exceeds the cost of those tokens, the demand for tokens will become infinite in a sense. So we see growth in AI demand as a a long term certainty.

And I can also share some numbers with you in terms of the growth that we're seeing on our own Bailian platform. From November, December last year through the May of this year, it's higher than 10 times growth. In terms of our ARR, it's already over RMB 8 billion. And I think this quarter it's highly certain that we can achieve ARR of over RMB 10 billion.

Operator

Your next question comes from Ellie Jiang with Macquarie.

Ellie Jiang

Good evening management. Thank you very much for taking my question. I just wanted to stay on the topics of that global comparisons. So if you look at globally, the overseas peers seems to have captured the most immediate ROI's in enterprise agentic workflows, whereas for the consumer and the monetization would remain a bit lagged. So going forward, considering that Alibaba is investing in multi fronts for infrastructure models, cloud and Qwen app, how do we evaluate the strategic priority and resources allocation between 2B and 2C initiatives if going forward enterprise side continues to gain more traction, will we consider gradually shifting more resources away from Qwen app to cloud and MaaS? Thank you.

啊，感谢管理层接受我的问题啊，我还是想接着刚才我们呃讲的这样一个国际间的对比来呃，提问，因为，呃，展望全球呢，我们，呃似乎海外的一些同行，他们是在企业的这些智能体工作流方面是呃，更好的把握到了就是，呃，眼前的这个机会啊但是对他们来说，呃，消费端的这个变现还是呃，相对滞后的那么展望未来，呃，现在我们阿里巴巴在投资多种这个基础设施多种模型啊，云啊，千问APP 等等，那么我们就是呃，阿里巴巴对于to C to B 这两边的战略优先级啊是怎么考虑的以及资源分配的啊，这个优先级如何那么如果呃，未来的话，企业端啊发展的更加好的话我们会不会把呃更多的资源啊，从从to C 端转移到这个啊，比如说MaaS 这一方面

Unknown Executive

非常感谢您的这个问题啊，就是你这个问题其实问的也很好但是从我们自己的从AI 本身本质上的这个原理来说其实它更更是一个计算范式的革命那在计算这个范式革命，其实最后其实还是要能够帮助用户去完成任务或者帮助用户去去更好的去解决问题，那么从这个角度上来说我觉得 To B 和to C 本质上是一样的，但是就现在来说最我们看到无论是全球还是在中国最能够接受客户付费意愿的确实在这个to B 的领域因为这和他的ROI 更容易计算，也就是这些企业的付费意愿更强所以我们的大部分的推理资源其实也是投入在这个to B 的这个这个商业化领域

但是另外一个层面，其实AI 无非最终就是要作为人的一个助理那作作为人的助理而言，有工作的助理，也有个人的助理也有学习的助理从某种程度上来说，其实他要本质要解决的问题是一样的就是用AI 怎么样帮助人去解决任务啊这个任务可能有to B to C 或者学习工作生活那么我们相信to C 的to C 的业务可能他的就现在的客户的接受程度和付费意愿来说，他需要一定的一定的投资周期但是我们相信to C 的AI 助理一样会随着技术的技术的进展以及客户的接受程度或者在帮助他完成更多的任务之后，慢慢形成一个他的商业模式这个商业模式我们其实在海外也已经看到了是吧包括我们在国内，其实也会在我觉得在未来一两年之内我们也会看到在to C 的AI 助理方面有很多的商业化的这个这个进展会产生

Thanks for that question. And it's a good question. But I think, you know, fundamentally from the perspective of AI development, it's really all about paradigm shift in computing and it's about leveraging this new technology to help users, whoever they are, to complete tasks and solve problems. And that applies equally on the 2C side as well as on the 2B side.

Now certainly at present, we see higher willingness to pay on the 2B side because it's easier to show a business case with compelling ROI for a business. And at present, most of our infrastructure resources are therefore channelled to the 2B side. But at the end of the day, AI ultimately is an invention that's there to be a helper and assistant to humans, to help humans with a whole range of things spanning their own daily life, their studies, and and their work.

And what AI does really is the same across all of those scenarios. It's about solving problems. And that's true for 2B and for 2C. So certainly there's less willingness to pay today for for 2C. But we're already seeing a business model where consumers are paying for individual usage in the US. And I'm confident that the same will come to be the case in China, especially as the technology improves, as it's better able to help them solve real problems in their, in their daily lives. So we think that ultimately this will be the same business model internationally and I think we'll probably get there in China in the next say, one to two years.

Operator

Our next question comes from Joyce Ju with Bank of America.

Joyce Ju

啊，感谢管理层接受我的提问呃，我是想follow up 一下啊前面提到的这个关于我们云业务的，呃，未来发展除了加速之外能不能请管理层再跟我们讲一下在EBITA margin 上的趋势特别是在未来几个季度，随着我们的加速啊我们会不会看到和国外类似的，呃这个margin 扩张的啊这么一个趋势，谢谢

Thanks, Management, I have a follow up question also on the future growth of the cloud business. And I'd just like to understand what your view is on EBITA margins in the cloud business over the next few quarters. Do you think as this business accelerates, we can expect to see similar margins as we see in your international peers?

Unknown Executive

好，呃，非常感谢你那个问题就是就现在AI 的技术以及对于AI 技术对各行业的渗透来说我们现在觉得还是处于一个早期的阶段，但是就我们的阿里云以及我们的AI 业务的目标而言主要还是要做增长以及用户数，以及用户的token消耗和这个增和这个和这个市场份额以绝对领先的我们希望还是说能够超过行业平均增速的速平均增长速度来进一步快速的获取更大市场份额，来夯实我们的绝对的市场领先地位利润率是我们的第二目标，但是由于现在现在有几个几个行业的一个非常明确的一个一个行业特点也就是说，第一，我们觉得判断未来三到五年内其实AI 的行业的这个需求还是很难，因为有有很多的物理瓶颈的限制无论是AI 数据中心的建设的周期，以及行业内芯片或者memory 各方面的各方面的生产周期物理物理扩厂，物理物理整个的产能的这个增长都觉得我们觉得还是三到五年内很难能够支撑 AI 的需求的这个增长所以这个角度上来说，阿里云历史上因为有很强大的一个客户规模效应和资产我们历史上的CapEx 的规模效应在这个规模效应下，由于现在的市场供需的紧张现在实际上我们新的一台服务器某种程度上相同的服务器在今年去部署上线的成本是在我们两年前部署上线的一倍以上，也就是这个成本增长了百分之100%以上那这样的一个新的服务器的重置成本，对于我们的云的客户老客户的需求以及新客户的需求都有一个定价的牵引作用这个定价牵引作用，我们相信对于未来一个比较长周期内云的各各项服务的一个一个资产定价会是有一个比较正向的提升的一个提升的一个效果吧

那还有第二个就是我们还看到一个，就是我们阿里云的MaaS业务的快速增长因为MaaS业务本身就是一个收入，相当于毛利对比我们传统的就是资整个的IT 资产类的业务相对来说是一个高毛利的业务同时由于我们刚才已经说到了，由于整个推理技术的优化单卡的产能还会持续的提升，所以我们现在看到的一个情况如果我们一个同样的服务器交给我们的百炼平台所创造的营收和毛利水平是高于我们传统的云计算简单的算力服务的所以这个业务的收入的占比提升，我们也会相信能够提升我们未来的毛利水平那还有一个就是我们的全栈技术优势，那平头哥的我们的AI 芯片的一个自研以及平头哥AI 芯片的未来的规模放量，有助于我们在整体来说提供一个可能在中国最好的一个性价比水平的一个推理平台那这个推理平台我们相信也能够创造出更好的一个毛利更好的一个毛利率，和我们的模型进行一个比较强的协同所以因为这几个特殊，因为这几个客观的一个因素存在所以我们判断未来这个一到两年阿里云的毛利率会有一个比较显著的一个提升那最近也会在最近的一两个季度内看到这些变化

I I think when it comes to the deep penetration of AI technology across all different industries, we're still really in the early days of that long process, but our objective is clear. Our objective is to achieve growth, to drive growth, to drive growth in token consumption and to acquire larger market share. We aim to maintain growth that is faster than the market average in order to gain larger market share and firmly cement our absolute market leadership position. So those are the primary objectives and margin is still secondary.

The other thing to be pointed out is that for the next three or even 5 years to come, there are physical constraints on production, production capacity for chips, for memory, for the physical things that are needed to support all this growth in demand. An advantage that we have in Alibaba Cloud is the scale of our customer base as well as the scale effect from all of the CapEx that we've put in over these years.

But in this environment of market scarcity, we're already seeing that the cost for us to deploy one new server this year is double what that same server would have cost a year ago, so the cost inflation has been over 100%. So given that higher replacement cost effect, we have a certain pricing power with respect to new customers and also old customers. So I think in the long term the asset pricing effect will be positive for our revenues going forward.

Secondly, we see very rapid growth in MaaS as we reported to you and inherently as we said, MaaS represents a much higher level of gross margin than IaaS or traditional types of IT operations. So as demand for inference continues to grow exponentially, we expect this will be very positive for gross margin and due to the optimization of our reasoning technology, the output capacity, the productivity of a single card will continue to rise.

An additional factor is as we continue to scale up the deployment of T-Head, the T-Head chips represent the highest value for money compute power on the cloud platform and that also will contribute to a better gross margin. But for several objective reasons that I've outlined, I think overall in the next 2 to 3 years we can expect to see a significantly higher gross margin for Alibaba Cloud and we can expect to start to see that in the next 1 to 2 quarters.

Operator

Your last question comes from Gary Yu with Morgan Stanley.

Gary Yu

Hi. Thank you for the opportunity I have a question regarding CapEx. So what kind of level of CapEx investment is required in order to satisfy the demand from both MaaS and also the long term cloud revenue and also management mentioned about T-Head opportunity, what is the current penetration of T-Head being deployed on AliCloud and as this penetration increased margin uplift we should expect from our in house chip? Thank you.

嗯，非常感谢关于CapEx我的问题，呃，我第一个问题是关于呃，我们的呃，资本开支方面就是为了，呃实现我们这个MaaS，呃，以及云业务方面的收入目标我们需要维持什么样的一个资本开支的水平呃另外一个问题刚才讲到啊，平头哥想知道现在呃，我们呃，在我们的系统中平头哥芯片的渗透率已经达到百分之多少然后随着它的进一步渗透，呃，具体可以给我们的呃毛利带来呃多大的提升

Unknown Executive

好，谢谢你的问题啊，就是你的第一个问题也比较重要就是其实呃，我们在上个季度的我们的讲稿中也已经提到了就是我们其实对未来五年的一个营收的目标有一个非常高的营收目标，那在那个目标情况下其实我们对比2022年2022年和2023年的也就是AI 大模型还没爆发的，这个年代的就是阿里云的外部营收那个收入目标大概是是一个增长十倍的收入目标那粗浅的计算可以可以理解为，至少是当时阿里巴巴阿里云所持有的数据数据机房资产的十倍以上才能够支撑我们的长期的业务目标所以某种程度上，我们未来要建的数据中心的规模基本上是一个对比 2022年是一个十倍以上的增长，这是我们所有投入的CapEx 也好，包括我们现在还有不少方式不少用OpEx 方式去获取的这些算力，呃来说这是一个我们的总的目标所以我们的对比前面三年前面所说的三年RMB 3800亿来说我们面向未来的这个五年目标来说，其实我们相信我们为了获取这些算力中心所获取的这个投入的投入资金会远远超过我们原来的原来的RMB 3800亿当然现在这个情况因为已经比较复杂啊，不见得会所有的算力中心都会由我们自建的CapEx 去获取比如说我们会用OpEx 租赁的方式去获取包括我们随着我们平头哥芯片的产能的扩大我们也可能会通过去销售平头哥AI 服务器的方式去销售给各个算力中心或者说数据中心的服务商，同时和这些数据中心的服务商共同去建设所以未来会有多种方式去支撑我们的数据中心的容量的一个扩张但是最基本的最基本的这个数据需求了数据中心的需求来说我们是应该是对标大模型没有爆发前的2022年的一个十倍的一个一个数据中心规模

Thanks. So the first question is quite an important one. And actually in our prepared remarks delivered at the last quarter's earnings call, we set out a forecast for the coming five years for revenues. And it was a very high target. But essentially, I think if you compare where things were in the year 2022 before this explosive growth in AI models and what we expect to need in 2033, I think we're talking about a 10X increase.

So we need 10 times the amount of data center infrastructure compared to what we had in 2022. But there are different ways to get that compute capacity. Some of it can be CapEx, part of it can also be OpEx. And we're actually now acquiring quite a bit of computing capacity using OpEx.

The situation is complex today for reasons we've discussed, but I think it's likely given that kind of investment that we will overshoot the original CapEx figure that we had stated of RMB 380 billion. But at the same time we can acquire some compute through OpEx and as we have our own proprietary T-Head chips, we can actually also sell AI servers leveraging those chips to other computing centers or we can co-build computing centers with others.

So there are different ways that we can get to where we need to get, but the bottom line is that the demand for compute infrastructure is going to be 10X of 2022.

好，我们，我们的自研芯片其实在阿里云的部署这个比例现在还并不是是属于一个少部分的范畴当然我这里也分享一下，就平头哥的芯片，我们除了有自己的GPU 之外我们的CPU，包括我们的存储网络芯片都是一个全栈自研的所以未来我们有机会用我们一个全栈从我们的GPU CPU 存储到网络芯片上进去进行一个全栈的一个自研，那现在这个比例还比较低，因为有一些各方面客观的原因比如说在中国国内的这个整个半导体的产能产能的量还是比较少，当然这几年中国国内的半导体的产能也在持续的扩展扩张当中所以我们觉得随着这个平头哥，我们自研全套芯片的渗透率的提升对于我们毛利率的提升影响会是非常大但这个大现在就是说有一些情况在互相的影响比如说由于中国的国产的国产半导体的整个的制程相对来说比国外的相对来说还是相对差一点那么总体同样的一个芯片，无论是能耗啊，还是说还是效率上来说都会有一些对比国外先进的芯片来说，还还会有一些有些差距但是由于我们可以看到国外主流的AI 芯片的毛利率非常之高是吧接近基本上接近在60%到80%的毛利率，那么无论是就算是国内芯片的总体的性能或者说功耗会有一定的提升但是在这个60%到对比国外先进芯片60%到80%的毛利率的中间其实有个非常大的我们觉得有一个性价比提升的空间，但这个性价比提升空间最终对我们的整体毛利率的提升的影响需要看看后面我们的产能的扩张，以及整体的嗯产能扩张之后对我们的现有的多少存量有一个有一个替代的一个比例

Yes. So in terms of our T-Head proprietary chips, they can be deployed across a very large part of our AI infrastructure and not just compute chips, but we have a full stack including memory. But at present the ratio is still relatively low and that's because of constraints around production capacity in China, which has been limited. Of course, it's been growing.

But as we deploy more and more of our own proprietary T-Head chips, the new chips will certainly contribute very, very significantly to gross margin expansion. It's true to say that domestically produced semiconductors in China lag behind the leading overseas ones in terms of energy efficiency and production efficiency.

However, if you look at globally leading AI chip vendors today, their gross margins are as high as 60% or even 80%. So as we ramp up domestic chip production and the capabilities improve, I think there's a lot of room for our chips to be providing very high value for money as compared to that 60% to 80% gross margin than other vendors are taking.

Lydia Lu

Thank you. This brings us to the end of today's earnings call. We appreciate your time and participation and we look forward to speaking with you soon.

Operator

Thank you. You now may disconnect your lines.

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