Two signals from China's AI buildout and Google's custom-silicon supply chain.
🗄️ Alibaba's AI Buildout Hits Profit
Decoded: Alibaba's quarterly net profit fell 75% as capital spending rose 75% to 67.68 billion yuan. AI cloud and compute revenue climbed 45% to 48.44 billion yuan, while adjusted earnings per U.S. share were 8.52 yuan versus 10.53 yuan expected. The company has spent about half of a planned 380 billion yuan AI investment for 2026-29, Reuters reported.
Why it matters: Alibaba is converting AI demand into cloud growth, but the near-term cost is visible in margins and earnings. Its move toward proprietary chips is now central to whether that spending produces acceptable returns.
🗄️ Google Adds Marvell to Its TPU Orbit
Decoded: Marvell granted Google a warrant for up to 58.97 million shares at $206.58 each, worth about $12.2 billion if fully exercised, alongside a custom-chip agreement supporting Google's TPU ecosystem. Most vesting is tied to Marvell generating as much as $120 billion of product revenue from Google through fiscal 2033—a threshold, not a purchase commitment. Marvell rose about 9.9% and Broadcom fell about 4.6% after the deal, Reuters reported.
Why it matters: Google is adding supply leverage without displacing Broadcom's existing agreement through 2031. For chip investors, the signal is a broader addressable market for Marvell and less assumed exclusivity for Broadcom.
Stay decoded. See you tomorrow.
— The Get AI Decoded Team
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