New Delhi, Aug. 20 -- Alibaba Group Holding Ltd.'s profit plunged more than 75% after China's e-commerce leader ratcheted up AI spending while grappling with a broad Chinese consumption slowdown. Alibaba's US-listed shares fell 4% in premarket trading on Thursday before trimming some of the losses, with the stock last down 3.1%.

The online retail giant-turned-AI lab reported a 9% jump in revenue, in line with estimates and reflecting torrid growth in demand for the computing capacity its cloud division provides. But net income tumbled three-quarters to 10.5 billion yuan ($1.6 billion) and it registered a free-cash outflow of more than $6.6 billion, reflecting the rising cost of AI projects and computing infrastructure. Alibaba's US share...