Chinese e-commerce behemoth Alibaba on Friday beat profit expectations in its September quarter, but sales fell short as sluggishness in the world’s second-largest economy hit consumer spending.

Alibaba said net income rose 58% year on year to 43.9 billion yuan ($6.07 billion) in the company’s quarter ended Sept. 30, on the back of the performance of its equity investments. This compares with an LSEG forecast of 25.83 billion yuan.

“The year-over-year increases were primarily attributable to the mark-to-market changes from our equity investments, decrease in impairment of our investments and increase in income from operations,” the company said of the annual profit jump in its earnings statement.

Revenue, meanwhile, came in at 236.5 billion yuan, 5% higher year on year but below an analyst forecast of 238.9 billion yuan, according to LSEG data.

The company’s New York-listed shares have gained ground this year to date, up more than 13%. The stock fell more than 2% in morning trading on Friday, after the release of the quarterly earnings.

Markets are now watching whether a slew of recent stimulus measures from Beijing, including a five-year 1.4 trillion yuan package announced last week, will help resuscitate the country’s growth and curtail a long-lived real estate market slump.

The impact on the retail space looks promising so far, with sales rising by a better-than-expected 4.8% year on year in October, while China’s recent Singles’ Day shopping holiday — widely seen as a barometer for national consumer sentiment — regained some of its luster.

Alibaba touted “robust growth” in gross merchandise volume — an industry measure of sales over time that does not equate to the company’s revenue — for its Taobao and Tmall Group businesses during the festival, along with a “record number of active buyers.”

“Alibaba’s outlook remains closely aligned with the trajectory of the Chinese economy and evolving regulatory policies,” ING analysts said Thursday, noting that the company’s Friday report will shed light on the Chinese economy’s growth momentum.

The e-commerce giant’s overseas online shopping businesses, such as Lazada and Aliexpress, meanwhile posted a 29% year-on-year hike in sales to 31.67 billion yuan.  

Stymied by Beijing’s sweeping 2022 crackdown on large internet and tech companies, Alibaba last year overhauled the division’s leadership and has been shaping it as a future growth driver, stepping up competition with rivals including Baidu and Huawei domestically, and Microsoft and OpenAI in the U.S.

Alibaba, which rolled out its own ChatGPT-style product Tongyi Qianwen last year, this week unveiled its own AI-powered search tool for small businesses in Europe and the Americas, and clinched a key five-year partnership to supply cloud services to Indonesian tech giant GoTo in September.

Speaking at the Apsara Conference in September, Alibaba’s Wu said the company’s cloud unit is investing “with unprecedented intensity, in the research and development of AI technology and the building of its global infrastructure,” noting that the future of AI is “only beginning.”

Correction: This article has been updated to reflect that Alibaba’s Cloud Intelligence Group reported quarterly revenue of 29.6 billion yuan in the September quarter.

Elon Musk’s artificial intelligence company xAI is raising up to $6 billion at a $50 billion valuation, according to CNBC’s David Faber.

Sources told Faber that the funding, which should close early next week, is a combination of $5 billion expected from sovereign funds in the Middle East and $1 billion from other investors, some of whom may want to re-up their investments.

The money will be used to acquire 100,000 Nvidia chips, per sources familiar with the situation. Tesla‘s Full Self Driving is expected to rely on the new Memphis supercomputer.

Musk’s AI startup, which he announced in July 2023, seeks to “understand the true nature of the universe,” according to its website. Last November, X.AI released a chatbot called Grok, which the company said was modeled after “The Hitchhiker’s Guide to the Galaxy.” The chatbot debuted with two months of training and had real-time knowledge of the internet, the company claimed at the time.

With Grok, X.AI aims to directly compete with companies including ChatGPT creator OpenAI, which Musk helped start before a conflict with co-founder Sam Altman led him to depart the project in 2018. It will also be vying with Google’s Bard technology and Anthropic’s Claude chatbot.

Now that Donald Trump is President-elect, Elon Musk is beginning to actively work with the new administration on its approach to AI and tech more broadly, as part of Trump’s inner circle in recent weeks.

Trump plans to repeal President Biden’s executive order on AI, according to his campaign platform, stating that it “hinders AI Innovation, and imposes Radical Leftwing ideas on the development of this technology” and that “in its place, Republicans support AI Development rooted in Free Speech and Human Flourishing.”