Amazon's AWS revenue grew 37% year over year to $42.2 billion in Q2; the company says its AI business topped a $25 billion annual run rate. Alibaba's AI cloud grew 45% year over year to about $7.1 billion in the June quarter, while net income fell 75%.
Amazon's free cash flow has turned negative amid heavy AI spending, and it raised its 2026 capital-spending outlook to about $220 billion. Management says customer demand already exceeds available computing capacity. Alibaba's capital expenditure rose 75% year over year in its latest quarter; it also raised HK$80 billion through a share placement earmarked for AI infrastructure.
Alibaba's full-stack plan spans chips, cloud, models and applications; its new chip is expected to enter mass production in 2027. Amazon trades at about 23.6 times forward earnings, compared with Alibaba's 17.9. Alibaba is expected to deliver faster earnings growth from a lower base, but more of that outlook depends on AI investments paying off.
