Ant Group profits tumble 31% as costs stack up

The news: Ant Group’s quarterly profit tumbled 31% as the company funnelled funds into artificial intelligence and other revenue-boosting growth projects.

The numbers: Ant Group posted net profit of 5.4 billion yuan ($1.17 billion) for the three months to 31 December, down 31.4% from a year earlier, according to Reuters calculations based on Alibaba Group Holding’s results published Thursday. Ant Group’s earnings lag one quarter behind Alibaba’s, which holds a one-third stake in Ant.

The context: Ant has been pursuing a turnaround by investing in AI initiatives which include building its own large language models. In March, Ant said it had used Chinese semiconductors to develop new technologies for training AI models, cutting costs by 20%.

Last month Chinese media reported that Ant Group is considering listing its overseas arm, Ant International on the Hong Kong Stock Exchange.