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Alibaba said it is working on a rival to ChatGPT, the artificial intelligence chatbot that has caused excitement across the world. Alibaba said its own product is currently undergoing internal testing.

Kuang Da | Visual China Group | Getty Images

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.”

Alibaba touts AI growth

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.

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Nvidia says U.S. government will allow it to resume H20 AI chip sales to China

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Nvidia says U.S. government will allow it to resume H20 AI chip sales to China

Nvidia CEO Jensen Huang attends a roundtable discussion at the Viva Technology conference dedicated to innovation and startups at Porte de Versailles exhibition center in Paris on June 11, 2025.

Sarah Meyssonnier | Reuters

Nvidia announced Tuesday that it hopes to resume sales of its H20 general processing units to clients in China, saying that the U.S. government had assured the company would be granted licenses.

Nvidia’s sales of the H20 chips, which had been designed specifically to keep them out of export controls on China, were halted in April.

“The U.S. government has assured NVIDIA that licenses will be granted, and NVIDIA hopes to start deliveries soon,” the company said in a statement.

This comes against the backdrop of a preliminary trade deal between Washington and Beijing last month that sought China to resume rare earth exports and the U.S. to relax tech export controls.

Nvidia CEO Jensen Huang in recent months has ramped up his lobbying against export controls, arguing that they inhibited American tech leadership. In May, Huang said chip restrictions had already cut Nvidia’s China market share nearly in half.

Huang also announced a new “fully compliant” GPU, NVIDIA RTX PRO, saying it was ideal for smart factories and logistics.

The potential change in U.S. stance follows a meeting between Huang and U.S. President Donald Trump last week.

In his meeting with Trump and U.S. policymakers, Huang had reaffirmed Nvidia’s support for the administration’s job creation and onshoring efforts, as well as the aim for America to lead in global AI, the company said.

Meanwhile, in Beijing, it was confirmed that Huang has met with government and industry officials to discuss the benefits of AI and ways for researchers to advance safe and secure AI for the benefit of all. 

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Cognition to buy AI startup Windsurf days after Google poached CEO in $2.4 billion licensing deal

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Cognition to buy AI startup Windsurf days after Google poached CEO in .4 billion licensing deal

In this photo illustration, a man seen holding a smartphone with the logo of US artificial intelligence company Cognition AI Inc. in front of website.

Timon Schneider | SOPA Images | Sipa USA | AP

Artificial intelligence startup Cognition announced it’s acquiring Windsurf, the AI coding company that lost its CEO and several other senior employees to Google just days earlier.

Cognition said on Monday that it will purchase Windsurf’s intellectual property, product, trademark, brand and talent, but didn’t disclose terms of the deal. It’s the latest development in an AI talent war, as companies like Meta, Google and OpenAI fiercely compete for top engineers and researchers.

OpenAI had been in talks to acquire Windsurf for about $3 billion in April, but the deal fell apart, and Google said on Friday that it hired Windsurf’s co-founder and CEO Varun Mohan. Google is paying $2.4 billion in licensing fees and for compensation, as CNBC previously reported.

“Every new employee of Cognition will be treated the same way as existing employees: with transparency, fairness, and deep respect for their abilities and value,” Cognition CEO Scott Wu wrote in a memo to employees on Monday. “After today, our efforts will be as a united and aligned team. There’s only one boat and we’re all in it together.”

Cognition didn’t immediately respond to CNBC’s request for comment. Windsurf directed CNBC to Cognition.

Cognition is best known for its AI coding agent named Devin, which is designed to help engineers build software faster. As of March, the startup had raised hundreds of millions of dollars at a valuation of close to $4 billion, according to a report from Bloomberg.

Both companies are backed by Peter Thiel’s Founders Fund. Other investors in Windsurf include Greenoaks, Kleiner Perkins and General Catalyst.

“I’m overwhelmed with excitement and optimism, but most of all, gratitude,” Jeff Wang, the interim CEO of Windsurf, wrote in a post on X on Monday. “Trying times reveal character, and I couldn’t be prouder of how every single person at Windsurf showed up these last three days for each other and for our users.”

Wu said that the acquisition ensures all Windsurf employees are “treated with respect and well taken care of in this transaction.” All employees will participate financially in the deal, have vesting cliffs waived for their work to date and receive fully accelerated vesting for their, according to the memo.

“There’s never been a more exciting time to build,” Wu wrote.

WATCH: Google snatches Windsurf CEO after OpenAI deal dissolves

Google snatches Windsurf CEO after OpenAI deal dissolves

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Musk’s xAI faces European scrutiny over Grok’s ‘horrific’ antisemitic posts

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Musk's xAI faces European scrutiny over Grok's 'horrific' antisemitic posts

The Grok logo is being displayed on a smartphone with Xai visible in the background in this photo illustration on April 1, 2024. 

Jonathan Raa | Nurphoto | Getty Images

The European Union on Monday called in representatives from Elon Musk‘s xAI after the company’s social network X, and chatbot Grok, generated and spread anti-semitic hate speech, including praise for Adolf Hitler, last week.

A spokesperson for the European Commission told CNBC via e-mail that a technical meeting will take place on Tuesday.

xAI did not immediately respond to a request for comment.

Sandro Gozi, a member of Italy’s parliament and member of the Renew Europe group, last week urged the Commission to hold a formal inquiry.

“The case raises serious concerns about compliance with the Digital Services Act (DSA) as well as the governance of generative AI in the Union’s digital space,” Gozi wrote.

X was already under a Commission probe for possible violations of the DSA.

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Grok also generated and spread offensive posts about political leaders in Poland and Turkey, including Polish Prime Minister Donald Tusk and Turkish President Recep Erdogan.

Over the weekend, xAI posted a statement apologizing for the hateful content.

“First off, we deeply apologize for the horrific behavior that many experienced. … After careful investigation, we discovered the root cause was an update to a code path upstream of the @grok bot,” the company said in the statement.

Musk and his xAI team launched a new version of Grok Wednesday night amid the backlash. Musk called it “the smartest AI in the world.”

xAI works with other businesses run and largely owned by Musk, including Tesla, the publicly traded automaker, and SpaceX, the U.S. aerospace and defense contractor.

Despite Grok’s recent outburst of hate speech, the U.S. Department of Defense awarded xAI a $200 million contract to develop AI. Anthropic, Google and OpenAI also received AI contracts.

CNBC’s April Roach contributed to this article.

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