Amazon vs. Alibaba: Which E-Commerce Leader Has the Edge in AI?

Amazon and Alibaba are two e-commerce leaders that have been expanding into artificial intelligence (AI) and cloud infrastructure. Amazon's second-quarter results show it remains the stronger of the two companies, with net sales climbing 20% year over year to $200.6 billion and operating income surging 43% to $27.5 billion.

AWS accelerated to 37% growth, its fastest pace in eighteen quarters, reaching a $169 billion annualized revenue run rate. Management highlighted that AWS' AI and custom chips businesses now exceed a $25 billion annual revenue run rate.

Amazon's diversified revenue base spanning retail, advertising, and rapidly scaling AI infrastructure gives it a broader growth runway than most peers. The company reported a 26% year-over-year increase in advertising revenues to $19.8 billion.

Alibaba's fiscal first-quarter results show the company is mid-transition, with total revenues rising 9% year over year to RMB269.0 billion. Alibaba Cloud's external revenues surged 45%, its fastest pace in 22 quarters, driven by AI-related product revenues reaching RMB12.4 billion.

The costs of Alibaba's buildout are visible, with capital expenditure reaching RMB67.7 billion for the quarter and adjusted EBITDA falling 30% year over year. Management expects quick commerce to reach profitability by fiscal 2029 and contribute a meaningful share of platform volume.