Alibaba Cloud is undergoing a comprehensive upgrade toward an agentic cloud model, with AI emerging as the main driver of faster growth. During Alibaba Group’s fiscal 2027 first-quarter earnings call, Group CEO Wu Yongming said annual recurring revenue from AI-related products exceeded RMB49.5 billion ($7.3 billion), representing 35% of Alibaba Cloud’s external commercial revenue. The company said those products have significantly higher gross margins than its average cloud offerings and expects AI and cloud revenue growth to accelerate further over the coming quarters. The ARR figure revises an earlier report that put AI-related revenue above RMB16 billion.