Trillion-dollar Alibaba Releases Results: Wu Yongming Centralizes Power, and the Performance Tests Cai Chongxin's Patience
In 2025, Alibaba underwent a series of reflections and corrections. Cai Chongxin, the Chairman of the Group's Board of Directors, made a rare statement in a public speech: In the past five years, Alibaba has experienced numerous setbacks, but it has returned to the right track through organizational reforms. Between the lines, there was dissatisfaction with the lagging strategy during Zhang Yong's era. This long - overdue review provided some explanation for Zhang Yong's departure and placed all expectations and pressure on the successor, Wu Yongming.
One year later, Alibaba released its first ever report card with a trillion - yuan revenue. On May 13, 2026, Alibaba disclosed its financial report, showing that in the fiscal year 2026, Alibaba's total revenue reached 1023.67 billion yuan, a year - on - year increase of 3%, and it reached the trillion - yuan mark for the first time. However, the annual net profit was only 102.127 billion yuan, a year - on - year decrease of 19%. In the fourth quarter, the adjusted EBITA plummeted by 84% year - on - year to 5.102 billion yuan.
Many people simply attribute the weak profit to Wu Yongming's radical investment, but they ignore a deeper fact: As one of the 18 founding members of Alibaba, the CEO is now facing more complex and heavier pressure than at any time during Zhang Yong's era, which further tests the patience of the veteran faction led by Cai Chongxin.
I. Behind the Trillion - Yuan Revenue
The trillion - yuan revenue is a new peak in Alibaba's scale, but it is also a watershed for growth quality. Excluding the impact of disposed businesses such as Gaoxin Retail and Intime, Alibaba's revenue in the same caliber increased by 11% year - on - year in the fiscal year 2026. The core business still showed resilience, but the overall growth rate of 3% has dropped to a historical low.
Comparing with the 51% revenue growth rate in the fiscal year 2018 during Zhang Yong's era, this cliff - like decline clearly reflects the cruel reality that the Chinese Internet traffic dividend has completely ended, and it also confirms Cai Chongxin's previous judgment of "numerous setbacks in the past five years".
The "halved" decline in the profit side is the core of market anxiety, but it is also the most easily misinterpreted part. In the fiscal year 2026, Alibaba's net profit attributable to shareholders was 105.904 billion yuan, a year - on - year decrease of 18.7%. In the fourth quarter, the Non - GAAP net profit was only 86 million yuan, a year - on - year plunge of 99.7%. However, this is not a passive loss due to business deterioration, but an active bearishness under strategic choice. Alibaba included almost all AI R & D and computing power infrastructure investments in the current expenses, resulting in a net outflow of 17.3 billion yuan in free cash flow in a single quarter, while it was a net inflow of 3.743 billion yuan in the same period last year.
Wu Yongming used a precise metaphor to explain this investment logic in the earnings conference call: "AI is more like a manufacturing industry. To obtain more revenue, two core factories must be established - an AI training factory and an AI inference factory. Now, almost no card in our servers is empty."
As of March 31, 2026, Alibaba held 520.824 billion yuan in cash reserves. This is the confidence for Cai Chongxin to pay for the AI transformation, which is sufficient to support high - intensity investment for the next 3 - 5 years. However, this also means that short - term profits will inevitably be continuously diluted.
However, embarrassingly, Alibaba was caught in a double dilemma of weak retail growth and unbalanced AI investment returns last year. The core e - commerce was continuously squeezed by Pinduoduo and Douyin. In the fourth fiscal quarter of the fiscal year 2026 (January - March 2026 in the natural year), the customer management revenue only increased slightly by 1% year - on - year. To maintain the basic market of instant retail, Alibaba announced in July 2025 that it would invest 50 billion yuan in subsidies for Ele.me and Taobao Flash Shopping in the next 12 months. Although it drove a phased increase in GMV, the market share only increased from about 28% to about 32%, and instead devoured a large amount of profit. As a result, the adjusted EBITA of Alibaba's China e - commerce group in the third quarter of the fiscal year 2026 decreased by 43% year - on - year, and the group's operating profit in that quarter plunged by 74% year - on - year to 10.645 billion yuan. The AI track also fell short of expectations. The financial report showed that in the past four quarters as of September 30, 2025, the capital expenditure on cloud + AI was as high as 120 billion yuan. Although the revenue of Alibaba Cloud in Q4 2025 increased by 36%, the monthly active users of Tongyi Qianwen on the C - side were in the tens of millions, far behind competitors such as Doubao (226 million) and DeepSeek (135 million). The B - side commercialization still mainly relied on cloud resource bundling, and the proportion of independent AI product revenue was extremely low, failing to form a new profit growth point. Continuous cash - burning led to a 71% year - on - year plunge in free cash flow in the first three quarters of the fiscal year 2026 (April - December 2025).
II. The Cost of Strategic Turn
To truly understand Wu Yongming's pressure, we must first compare the strategic differences between him and Zhang Yong, as well as Cai Chongxin's attitude change behind these differences.
The core strategy during Zhang Yong's era (2015 - 2023) was the "1 + 6+N" spin - off, which was essentially "subtraction". By spinning off businesses such as Alibaba Cloud, Cainiao, and Hema, the independent value of each segment was released, the group's management cost was reduced, and the focus was on the profitability of the e - commerce basic market.
Under Zhang Yong's leadership, Alibaba's highest annual revenue reached 939.427 billion yuan, the highest annual GAAP net profit was 149.263 billion yuan, and the market value once reached a peak of 830 billion US dollars. At that time, the competition pattern was relatively simple, and the main competitor was only Pinduoduo. Meituan and Douyin e - commerce had not yet posed a comprehensive threat. Zhang Yong's pressure was on "stable growth, profit improvement, and spin - off promotion", and there was sufficient room for error. However, with the exhaustion of the traffic dividend and the arrival of the AI era, this "conservative" strategy gradually became ineffective, which was also the core reason for Cai Chongxin to finally promote the management change.
After Wu Yongming took over as the CEO on September 10, 2023, the strategy changed. He did not completely stop the spin - off, but significantly adjusted the rhythm and scope of the spin - off: The spin - off and listing of Alibaba Cloud was suspended and it was brought back to the core of the group; the IPO application of Cainiao was withdrawn, and the independent listing was postponed; Taobao, Tmall, Ele.me, and Fliggy were integrated into the China e - commerce group to unify resources to compete with Pinduoduo and Meituan; businesses such as Hema and RT - Mart remained independent, but all listing plans were postponed.
This adjustment is by no means a negation of Zhang Yong, but a fundamental change in the era's proposition. Zhang Yong's era was the end of the Internet traffic dividend, and the core was "conservation" - optimizing efficiency in the established track and maximizing the existing value. Wu Yongming's era is the outbreak period of the AI revolution, and the core is "survival". If Alibaba fails to seize the AI wave, it will miss the growth ticket for the next decade. If it fails to maintain the e - commerce basic market, the AI transformation will lose its source of funds.
However, the cost of fighting on two fronts is an exponential increase in the investment scale. During Zhang Yong's era, Alibaba's average annual capital expenditure was about 55 billion yuan, mainly used for data center and logistics infrastructure construction. In Wu Yongming's era, the average annual investment in AI infrastructure alone will exceed 130 billion yuan. Coupled with the subsidy investment in instant retail and R & D expenses, the average annual total investment will be more than three times that of Zhang Yong's era.
In February 2025, Alibaba announced that it would "invest more than 380 billion yuan in AI infrastructure construction in three years". At this earnings conference, Wu Yongming further increased the investment: "To achieve the goal of an annual revenue of over 100 billion US dollars from cloud and AI commercialization in the next five years, the actual investment will far exceed 380 billion yuan. Compared with before the AI outbreak in 2022, the scale of data centers we need to build in the future will be more than ten times."
More seriously, Wu Yongming has to fight four battles at the same time: In the e - commerce battlefield, he has to counter Pinduoduo's low - price offensive (Pinduoduo's domestic GMV in 2025 was close to 70% of Alibaba's); in the content e - commerce battlefield, he has to block the encroachment of Douyin e - commerce (GMV has exceeded 5 trillion yuan); in the instant retail battlefield, he has to engage in close combat with Meituan; in the AI cloud battlefield, he has to compete with Baidu Smart Cloud for the industry's first place. This "besieged on all sides" competition pattern has never been encountered in Zhang Yong's era, and it also makes Cai Chongxin's "patience" the most precious resource.
III. Why is Wu Yongming's Centralized Power Pressure Far Greater Than Zhang Yong's?
Many people say that Zhang Yong brought Alibaba to the trillion - yuan level, while Wu Yongming made the profit disappear. This is a typical result - oriented prejudice. They are facing completely different era propositions, capital market environments, and expectations from the board of directors. This difference fundamentally determines the magnitude of the pressure on the two.
During Zhang Yong's era, the Chinese Internet was still at the end of the traffic dividend. The penetration rate of e - commerce continued to increase. Relying on its first - mover advantage and ecological barriers, Alibaba firmly occupied the leading position in the industry. At that time, the valuation logic of the capital market for Internet enterprises was "scale first, profit second". Investors were willing to pay for long - term stories. Alibaba's market value reached a peak of 830 billion US dollars, and there was a huge room for error. Zhang Yong's core task was to maximize profit collection at the end of the dividend period and release value through spin - off, without bearing the life - and - death pressure of "enterprise decline if the transformation fails".
In Wu Yongming's era, the industry environment has undergone a subversive change. The traffic dividend has completely dried up, e - commerce has entered a stock competition, and the price war has become white - hot. The AI revolution has swept the world, and technology companies are facing a survival crisis of "being eliminated if they do not transform". The valuation logic of the capital market has completely reversed, shifting from "long - term stories" to "short - term performance + commercialization implementation".
More importantly, Wu Yongming is facing three sharp contradictions. These contradictions are intertwined, forming a huge pressure closed - loop, and constantly consuming the market's patience.
First, the contradiction between short - term profit and long - term investment. AI transformation requires continuous cash - burning, but the capital market requires profit recovery. Wu Yongming needs to walk a tightrope between "burning money for the future" and "protecting profit and stabilizing the stock price".
Second, the contradiction between e - commerce defense and new business offense. As Alibaba's cash cow, Taotian Group needs continuous investment in price cuts and subsidies to maintain its market share, which will inevitably squeeze the funds for AI transformation. And AI requires huge investment, which will divert resources from the e - commerce business, forming a vicious cycle. In the fourth quarter of the fiscal year 2026, the adjusted EBITA of Taotian Group decreased by 7.3% year - on - year, which is a direct manifestation of this contradiction.
Third, the contradiction between industry competition and internal collaboration. Externally, it has to compete with four giants: Pinduoduo, Meituan, ByteDance, and Baidu at the same time. Internally, it needs to integrate businesses such as Taotian, Alibaba Cloud, and local life, break down organizational barriers, and achieve data and resource collaboration. Although Wu Yongming personally serves as the CEO of Taotian Group, which has significantly improved decision - making efficiency, it still takes time to completely change the departmental wall culture formed in Alibaba over the years.
Comparing the core indicators of Zhang Yong's and Wu Yongming's eras, the differences are obvious: In Zhang Yong's era, the highest revenue growth rate was 51%, the average annual capital expenditure was 55 billion yuan, and the market value peak was 830 billion US dollars. In Wu Yongming's era, the revenue growth rate is only 3%, the average annual investment exceeds 150 billion yuan, and the market value peak is 380 billion US dollars. Zhang Yong "followed the trend" and enjoyed growth during the dividend period. Wu Yongming is "breaking through against the trend" and carrying out a burdensome transformation in the cold winter. As the ultimate decision - maker, Cai Chongxin's patience may determine how much time Wu Yongming has to prove that his strategy is correct.
Conclusion
The trillion - yuan revenue is the end of Alibaba's e - commerce era and the starting point of the AI + consumer technology era. Zhang Yong took 8 years to push Alibaba to the peak of the Chinese Internet. Wu Yongming needs to lead Alibaba through the transformation canyon in a shorter time to find the next trillion - yuan growth curve.
Wu Yongming's pressure is heavier not because he has done worse than Zhang Yong, but because he has taken over a more complex and turbulent situation. He not only has to maintain Alibaba's e - commerce basic market, but also win in the AI gamble. He not only has to deal with competition from all directions, but also appease the impatient capital market. More importantly, he has to submit a qualified answer sheet to Cai Chongxin and the board of directors.
This article is from the WeChat public account "Yishi Finance" (ID: yishicaijing). The author is Dong Yang, and the editor is Gao Shan. It is published by 36Kr with authorization.