Alibaba, Tencent Disappoint Investors Hoping for Big AI Payoff

China’s twin leaders in artificial intelligence reported revenue that fell short of estimates, disappointing investors who hoped their growing spending on AI would turbocharge growth.

Alibaba Group Holding Ltd. posted its first operating loss since the depths of the Covid pandemic in early 2021, underscoring the extent to which China’s e-commerce leader is funneling cash into AI initiatives. That’s while revenue during the March quarter grew a less-than-projected 3%. Tencent Holdings Ltd. reported its slowest pace of revenue growth in over a year, though it outpaced its arch-foe thanks to a resilient advertising and gaming business.

The twin reports reflect ...