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Chinese Tech Giants Weather Earnings Headwinds on AI Investment Push

Alibaba Group Holding Ltd. and Tencent Holdings Ltd. reported modest growth in recent earnings while expanding investments across artificial intelligence services, cloud infrastructure, and autonomous agents. Both companies are navigating rising AI development costs amid intensifying competition in China's technology sector. Investors have largely looked past near-term results, betting on longer-term monetization prospects as the firms build out AI capabilities. Chinese tech shares surged to record highs this week, joining a broader Asia-wide rally in growth sectors. Rising AI expenditures have pressured margins at major technology firms globally, though analysts remain confident that productivity gains will eventually justify current investment levels. Tencent and Alibaba maintain their positions as China's dominant technology platforms while facing competition from emerging players.