Alibaba’s expensive pivot to AI - Asian Tech Roundup

Plus: Japan to start offensive cyber operations

Welcome to Computing's weekly roundup of tech news in Asia. This time we look at Alibaba’s financial fix, Japan taking the cyber fight to its adversaries and Atlassian’s layoffs.

Alibaba's latest quarterly results find the Chinese tech giant in an uncomfortable place between its existing ecommerce business and a projected future based on – you guessed it - AI. The company missed analyst expectations for earnings in the latest quarter, and its net income plunged 66% year-on-year. Predictably, the company's shares followed a downward trajectory too.

Kate Leaman, chief market analyst at AvaTrade, noted that Alibaba’s core ecommerce business is under pressure, with margins squeezed and consumer demand in China failing to rebound as hoped.

“Alibaba is repositioning itself around cloud and AI, but the transition isn’t clean,” she said. “The ecommerce engine is misfiring, while AI and cloud growth isn’t yet at scale to offset the drag.”

In fact, Alibaba’s cloud revenue rose a respectable 36% year-on-year with AI-related products “delivering triple-digit growth for the tenth consecutive quarter”, according to CEO Eddie Wu. But that even that wasn’t enough to satisfy investors, putting the firm in a bind.

“Companies are being valued on long-term innovation narratives around AI, automation, digital infrastructure,” Leaman explained. “But they’re still being judged quarter-by-quarter on old-economy fundamentals like demand, margins and cash flow. Alibaba is just a good example of that disconnect.”

Pivoting to AI is expensive, and all those datacentres, GPUs, LLMs - and particularly right now, memory chips - don’t pay for themselves.

So, cloud customers will have to pay for them. Alibaba Cloud has decided to hike prices by up to 34% across a range of services as the company focuses on building its cloud and AI future.

The company has limited competition in China, and moving to a new cloud provider can be very challenging, so customers will probably have to take it on the chin. (Other cloud providers are also raising prices due to supply issues and hardware costs.)

Australia

• Australian scientists claim to have developed the world's first quantum battery, a breakthrough they claim could revolutionise energy storage. Source
• Atlassian announced it is to lay off 1,600 employees, or 10% of the company, in a move CEO Mike Cannon-Brookes says is to fund investment in AI and sales. Source

China

• Chinese authorities are offering incentives to encourage the creation of one-person AI companies, aiming to foster innovation and entrepreneurship in the sector. Source
• Alibaba’s December quarter revenue missed estimates, with net income dropping 66%, as the company continues to invest heavily in AI and cloud. Source
• At the same time Alibaba Cloud is raising prices for its services by up to 34%. Source
• The EU has imposed sanctions on Chinese and Iranian companies associated with hacking, targeting China’s Integrity Technology Group and Anxun Information Technology Co (also known as iSoon), and Iran’s Emennet Pasargad. Source
• Nvidia has resumed sales of its H200 chips in China, following regulatory changes that allow the company to supply advanced AI hardware to Chinese firms. Source
• China is considering new restrictions on Hong Kong IPOs, potentially tightening controls on overseas listings and affecting tech companies seeking international capital. Source
• XPeng affiliate Aridge has raised $200 million to pursue its flying car ambitions ahead of a potential IPO in Hong Kong this year. Source
• ByteDance has suspended the launch of its Seedance 2.0 video AI model following copyright disputes with major Hollywood studios. Source
• A powerful AI model rumoured to be the next offering from DeepSeek has now been confirmed to be by Xiaomi. Source
• Hua Hong Group is preparing for 7nm production as Beijing intensifies efforts to achieve semiconductor self-sufficiency. Currently only SMIC, the country’s largest chipmaker, is capable of making advanced 7nm chips. Source
• Meanwhile Huawei is releasing new agent tools and compute offerings to capitalise on the OpenClaw craze. Source
• And Tencent is also getting in on the OpenClaw action with its own agent. Source

India

• PhonePe is reportedly considering an IPO in the US, with the ongoing US-Israel-Iran conflict causing market volatility. The fintech had initially filed draft IPO papers with the Securities and Exchange Board of India. Source
• The Telecom Regulatory Authority of India has proposed new rules for call management apps, including stricter requirements for call blocking, aiming to improve user control and reduce spam calls. Source
• Hong Kong-based satellite operator AsiaSat has started legal action against the Indian government following its barring of Chinese-linked satellite services. Source
• Meta has challenged a fine issued by the Delhi High Court for hosting walkie-talkie listings on Facebook Marketplace without mandatory licensing disclosures, saying the Central Consumer Protection Authority (CCPA) had no authority to act. Source
• Databricks is expanding its India team and has launched a launched an R&D centre in Bengaluru as enterprise AI demand in India accelerates. Source
• Unacademy is set to be acquired by UpGrad in a share-swap deal, signalling a consolidation of India’s edtech sector. Source

Japan

• Japan is to allow its Self Defence Force to conduct offensive cyber operations for the first time, starting on 1^st October. Source
• Sony’s new dynamic pricing experiment for PS Store, which adjusts discounts based on store activity and past purchasing behaviour, is causing outrage among gamers. Source

South Korea

• South Korea’s Naver has signed an agreement with Saudi Arabia’s AI agency to jointly develop an Arabic language-based large language model, expanding AI cooperation between the two countries. Source
• South Korean venture capital firms are increasing direct investments in Silicon Valley. Source
• Microsoft has blamed Samsung for a recent Windows 11 bug that made C: drives inaccessible. Source
• Samsung's experimental Galaxy Z Trifold phone, initially popular among buyers, is being discontinued due to production challenges and shifting consumer demand. Source
• Samsung has announced plans for an investment of more than $73 billion to strengthen its position in the AI chip sector. Source

Elsewhere in Asia

• The SIJORI region (Singapore, Johor, Indonesia, Malaysia) is emerging as a key hub for datacentre development, with cross-border collaboration driving growth in digital infrastructure. Source