Alibaba Cuts Buybacks 80% to $162 Million as AI Capex Jumps 75%
Updated
Updated · Yahoo Finance · Aug 23
Alibaba Cuts Buybacks 80% to $162 Million as AI Capex Jumps 75%
3 articles · Updated · Yahoo Finance · Aug 23
Summary
US$162 million of June-quarter repurchases marked an 80% year-over-year drop from US$815 million, signaling Alibaba has redirected cash away from buybacks despite still having US$19.3 billion of authorization.
RMB 67.7 billion of capital spending—up 75%—went into AI infrastructure after CEO Eddie Wu called AI Alibaba’s “most certain growth engine,” while cloud revenue rose 45%.
RMB 13.9 billion of adjusted EBITA losses in the new AI Labs and Applications segment, up from RMB 3.2 billion, helped push free cash flow to negative RMB 44.7 billion from negative RMB 18.8 billion.
US$3.2 billion of convertible notes and HK$12 billion of exchangeable bonds raised in fiscal 2026 helped fund the buildout, with total debt to adjusted EBITDA doubling to 2.29x.
Management says AI hardware can break even within three years, betting constrained compute supply through at least 2030 will justify lower buybacks and heavier infrastructure spending.
Will Alibaba's massive gamble on AI infrastructure pay off before its mounting debt and negative cash flows trigger a shareholder revolt?
Could rapid hardware obsolescence shatter Alibaba's aggressive three-year profitability timeline and turn its billion-dollar data centers into sunk costs?
Can Alibaba's 100-day modular data center rollouts quietly steal global market share from Western tech giants despite heavy regulatory scrutiny?