Alibaba, Tencent Shed $66 Billion as AI Profit Outlook Remains Unclear

Alibaba Group and Tencent Holdings both view artificial intelligence as a new growth engine for their cloud, advertising and consumer businesses, and continue to invest in AI models and computing infrastructure. With U.S. export restrictions constraining supplies of high-end GPUs, investors are focused not only on technological progress but also on whether capital spending can translate into revenue and profit.

After the companies reported their latest results, investors concluded that management had failed to clearly explain returns on AI investment or their ability to secure chips, putting pressure on their shares. Reports said Alibaba and Tencent lost about $66 billion in combined market value over two trading days. The available event data did not specify the trading dates or how much each company lost.