Alibaba results: "Alibaba is the definitive tech company of the entire China region"

CGTN Europe

CGTN Europe interviewed Rob Kniaz, founding Partner of H-Tree Capital

Transcript

00:00Let's get more on those Alibaba results.

00:03Let's go back to Rob Nice, founding partner of H3 Capital,

00:06that London-based technology venture capital firm.

00:09I think we've got you. I think we can hear you at this time.

00:11I certainly hope so.

00:12So you were going to tell me whether or not these were results you were expecting?

00:18Yeah, I think they're good.

00:19I think it's becoming pretty clear that Alibaba is the definitive tech company

00:23of the entire China region, the same way Google could be said for Europe and the U.S.

00:27I think it's really strong. They're just going from strength to strength.

00:30The company says that they've entered into their investment phase.

00:34I thought they were doing that already.

00:37I think for all these companies, it's continual investment.

00:39That's how technology is. You have to keep investing.

00:42Investors seem to be rewarding their investment in AI,

00:45which is tremendously expensive right now.

00:46But you're basically building a defensible base that once you come out on top

00:50becomes almost insurmountable.

00:52It's interesting to see the market's reaction because those shares are up

00:56despite that 53% drop in profit.

01:00Is that all about Alibaba's domestic AI chip that wowed the global tech market not long ago?

01:07I think the AI is obviously cutting into or going into CapEx right now.

01:12But I think the real upside there is they're spending a lot now on quick commerce,

01:16so the very fast deliveries across China.

01:18That's a very low-margin business, but, again, they want to create market share

01:21the same way Amazon would have done in the U.S.

01:23So they're spending a lot in that right now.

01:25Revenue has gone up, but margins are very low.

01:27So I think looking at the company, they're spending almost a break-even

01:31or loss-making scenario there to build market share in e-commerce in general

01:35and particularly with the instant shopping.

01:37So what's your outlook for Alibaba relative to rivals,

01:42to competitors across the e-commerce and AI hemisphere?

01:48I think they're the big gorilla in the room,

01:51and I think it's theirs to lose, frankly.

01:53I think they're in a great position.

01:54Similar to Google in the U.S., you can afford to be slow to the game

01:57or you can afford to make mistakes when you're that powerful.

01:59You know, Google's done a great job catching up now with Gemini 3.

02:02I think the same way, Alibaba has a lot of leeway in the China market

02:06to do lots of things right now and even make some mistakes

02:08and still come out on top in the long run.

02:10So I would not bet against them.

02:12Rob Nye, it's great to have you.

02:14Thanks for hanging in there.

02:16It was good to chat.

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