Alibaba Headcount Falls After Sun Art Exit In 2025 (UPDATED)

Core Insights - Alibaba Group's workforce decreased by approximately 34% in 2025, primarily due to the sale of Sun Art and a shift towards artificial intelligence [1][3] - The company ended December 2025 with 128,197 employees, down from 194,320 the previous year [2] - The workforce reduction was significantly influenced by the divestiture of Sun Art Retail Group and the exit from the department store chain Intime [3] AI Focus and Financial Goals - Alibaba introduced its most advanced AI model, Qwen3.5-Max-Preview, which ranked as the top Chinese system on a major benchmarking platform [4] - The company is expanding its Qwen model family and launching enterprise-focused tools like the Wukong AI service, while also increasing cloud and storage prices to enhance monetization [5] - Alibaba aims to generate over $100 billion annually from cloud and AI within five years, investing over $53 billion in AI infrastructure and reorganizing to focus on enterprise customers and AI services [6] Market Position and Valuation - There is strong demand for AI products and increasing usage across Alibaba's platforms, positioning its expanding AI ecosystem as a significant long-term revenue source [7] - First Eagle views Alibaba's stock as undervalued based on its AI potential, believing that the current valuation reflects its e-commerce business while the AI segment offers additional upside not yet fully recognized by the market [7]