Shares of Alibaba dropped after the Chinese giant’s net profit plunged in the fiscal fourth quarter ended in March.

Here’s how Alibaba did in the March quarter versus LSEG consensus estimates:

• Revenue: 221.9 billion Chinese yuan ($30.7 billion) versus 219.66 billion yuan expected.

Net income attributable to ordinary shareholders came in at 3.3 billion yuan, down 86% year-on-year.

Shares of Alibaba were around 5% lower in premarket trading in the U.S.

Alibaba had a rocky year in 2023, when it carried out its largest-ever corporate structure overhaul. It also separately implemented several high-profile management changes, with company veteran Eddie Wu taking over the reins as chief executive in September.

in a bid to signal confidence to shareholders, the Chinese tech giant said earlier this year that it increased its share buyback program by $25 billion through the end of March 2027.

Alibaba has been grappling with cautious consumer spending in China, but saw signs of a slight recovery in its core e-commerce business in the March quarter.

The Hangzhou-headquartered company has been ramping up its overseas push amid a domestic slowdown, where Alibaba has faced rising competition from low-cost players like PDD.

Revenue for the Taobao and Tmall division, which houses Alibaba’s China e-commerce business, rose 4% year-on-year to 93.2 billion yuan. That was faster than the 2% growth in the previous quarter.

Customer management revenue — which are sales received from services such as marketing that Alibaba sells to merchants on its Taobao and Tmall e-commerce platforms — rose 5% year-on-year, after coming in flat in the previous quarter. Alibaba’s international commerce business also logged a revenue increase of 45% year-on-year to 27.4 billion yuan.

Earlier this year, CEO Wu vowed to “reignite” growth in the e-commerce firm with further investments. There appear to be early signs of that taking hold in the March quarter.

“This quarter’s results demonstrate that our strategies are working and we are returning to growth,” Wu said in the earnings release.

The profit drop casts a long shadow on the earnings. Alibaba said the reason for the fall is “primarily attributable to a net loss from our investments in publicly-traded companies during the quarter, compared to a net gain in the same quarter last year, due to the mark-to-market changes.”

Investors are laser focused on Alibaba’s cloud computing division, which has struggled to reignite growth. The company was planning to spin off the cloud unit, but scrapped plans for an initial public offering last year.

Alibaba said its cloud computing unit brought it a revenue of 25.6 billion yuan, up just 3% year-on-year and marking the same growth rate seen in the previous quarter. 

The Chinese giant said it is in the process of reducing “low-margin project-based” contracts in its cloud division and expects AI-related products and public cloud, which relates to enterprise customers, to “offset the impact of the roll-off of project-based revenues.”

During the March quarter, AI-related revenue experienced “triple-digit growth year-over-year.”

“AI-related revenue was generated from various sectors including foundational model companies, internet companies, as well as customers from industries such as financial services and automotive,” Alibaba said.

Swedish financial technology company Klarna said Tuesday that nearly 9 out of 10 employees in its 5,000-strong workforce are now using generative artificial intelligence tools in their daily work.

Klarna, which lets individuals split their purchases into interest-free, monthly installments, said over 87% of its employees are using generative AI tools, including OpenAI’s ChatGPT and its own internal AI assistant.

The biggest users of generative AI in the company are those in non-technical groups, such as communications (92.6%), marketing (87.9%) and legal (86.4%), Klarna said.

At those rates, Klarna is seeing much higher adoption of generative AI within the company than in the broader corporate world.

According to a survey by consultancy firm Deloitte, 61% of people working with a computer use generative AI programs in their day-to-day work — sometimes without their line manager being aware.

Klarna has its own internal AI assistant, called Kiki.

According to the firm, 85% of all its employees now use Kiki, and the chatbot now responds to an average of 2,000 queries a day.

Klarna has said its decision to cut jobs en masse has paid off, while adoption of AI has enabled its underlying business to become more profitable.

The firm reported its first quarterly profit in four years for its September quarter, which it attributed to a reduction of credit losses as well as investments into AI.

In February, Klarna said its AI chatbot was doing the work of 700 full-time customer service jobs, netting the firm $40 million in savings.

The news caused shares of French outsourcing giant Teleperformance to tumble by nearly 20% as investors feared AI would disrupt the company’s own profitable call center business in the future. 

It’s a first for the annual CNBC Disruptor 50 list: a company landing at No. 1 for the second year in a row.

Perhaps no surprise, that company is OpenAI. More than any other startup in the 12-year history of the Disruptor 50 list, OpenAI’s disruptive impact and potential is unparalleled.

What’s distinct about the company and the AI revolution it’s leading is that OpenAI is not working in opposition to incumbents but rather as a partner to tech giants and other large corporations. It’s serving as an ally to help navigate and implement unprecedented changes, with new tools that can be customized for consumers and enterprise data sets.

OpenAI is not unique, but rather, represents a generation of AI startups that are aligned with the giants because of the compute power, and the massive funding, required to accelerate artificial intelligence learning. In fact, 34 of this year’s Disruptor 50 companies describe AI as critically important to more than half of their revenue. Thirteen say that it is generative AI, specifically, that is critically important to the majority of sales.

OpenAI topped the list for an unprecedented second year due to the company’s ongoing pace of innovation. In the past year, OpenAI has grown dramatically, announcing a range of new products and services related to its GPT large language model and business partnerships, as its consumer subscription option and a range of enterprise licensing deals have helped it generate a reported $2 billion in annual revenue.

On Monday, OpenAI launched a new AI model and desktop version of ChatGPT, along with an updated user interface. In a livestream event, Chief Technology Officer Mira Murati said the new model, GPT-4o, is “much faster,” with improved capabilities in text, video and audio. “This is the first time that we are really making a huge step forward when it comes to the ease of use,” Murati said.

After a dramatic boardroom battle in November, in which CEO Sam Altman was ousted and then just a few days later brought back after outrage from investors and employees, the company strengthened its board and management structure, with Altman himself rejoining the board in March. The scramble to rehire Altman and his team revealed the depth of corporate and venture capital support for the OpenAI CEO as an innovator and leader.

Then in February, the company debuted its text-to-video generator Sora (later in the year, an audio AI, Voice Engine, was also unveiled in a limited test) and it completed a funding round that valued the company at a reported $80 billion, up from a reported $29 billion at the time it was named No. 1 on the Disruptor 50 list in 2023.

Altman has positioned himself as a thought leader in terms of AI regulation, after testifying last year before Congress about the need for smart and careful AI guardrails. And the company is at the center of a maelstrom of concern about artificial intelligence. OpenAI is the focus of regulatory scrutiny, with the FTC probing whether it broke consumer protection laws and the SEC looking at whether, during Altman’s brief ouster, investors were misled. Meanwhile, the company has beefed up its legal team as it fights a range of lawsuits, from publishing companies, including The New York Times, and individual artists, such as author Jodi Picoult, suing over copyright violation.

But at the same time, OpenAI has struck new deals with IAC’s publisher Meredith, parent of Food & Wine and People, and the Financial Times, to compensate them for the use of their IP, and to drive traffic back to their content.

AI’s wave extends to many industries

This wave of AI innovation echoes that of the rise of the internet around the turn of the century, and mobile and cloud revolutions, but has some distinct characteristics. The current wave of AI disruptors, such as Databricks (No. 5 on this year’s list), Anthropic (No. 7), Scale AI (No. 12), Cohere (No. 30), AlphaSense (No. 40) and Glean (No. 43) is marked by a rapid pace of change, with the progress made every year by large language models, as well as by their reliance on costly chips and infrastructure.

Unlike the founded-in-a-garage mythology that dominated the Googles and PayPals of prior tech cycles, these AI-driven companies need GPUs and data centers, which has led most of them to partner with giants ranging from Microsoft and Nvidia to Oracle, Salesforce, Amazon and Alphabet. As a result we may not see as many new entrants into the AI sector as so-called Web 1.0 and 2.0, but the companies that do succeed, like those on our Disruptor 50 list, have the potential to be far more impactful and disruptive.

This year’s Disruptor 50 companies are using AI — and other key technologies, such as robotics and the cloud — across a wide range of industries. 

Enterprise tech is the best-represented sector, with 14 companies on this year’s list, including Databricks and AlphaSense, which are using AI to drive efficiencies and better mine data across key industries like finance.

Fintech is the second-best represented sector, with 10 companies on this year’s list, including Brex (No. 4), Chime (No. 22) and Ramp (No. 32), which have integrated AI assistants to streamline consumer interactions, generate suggestions and advise on efficient corporate budgeting.

In the health-care and biotech space, there are eight companies, including ElevateBio (No. 8), Generate Biomedicines (No. 25) and Spring Health (No. 45), using AI to accelerate drug development and improve patient outcomes.

And we’re seeing AI power the aerospace and defense industry. No. 2 on the list, Anduril, recently introduced new AI-powered drones, and uses an AI-powered operating system to infuse autonomy into a range of defense and security systems.

Just as every company, regardless of its industry, has become a tech company, pretty soon, every type of company will integrate AI.