MKsports east China, July 6, 2024. AI-powered products and applications have captivated lots of visitors during the 2024 World AI Conference. Photo: Xinhua" src="https://www.globaltimes.cn/Portals/0/attachment/2024/2024-07-07/14b3df6f-bef0-4143-9423-d02b0f55bc05.jpeg" />

Visitors watch a home robot working during the 2024 World AI Conference in Shanghai, east China, July 6, 2024. AI-powered products and applications have captivated lots of visitors during the 2024 World AI Conference. Photo: Xinhua

China's firm policy support for the private economy as well as the advancing artificial intelligence (AI) sector has played a vital role in supporting the sustainable development of the country's internet companies, observers said on Monday, as internet giants Alibaba and Tencent released their results. 

Alibaba last week announced its financial results for the quarter ended June 30, 2024, with revenue up 4 percent year-on-year to 243.23 billion yuan ($34.04 billion). 

Overall revenue for the Cloud Intelligence Group excluding Alibaba-consolidated subsidiaries grew over 6 percent year-over-year, driven by double-digit public cloud growth and increasing adoption of AI-related products. AI-related product revenue continued to grow by triple digits year-on-year. The company said that it will continue to invest in customers and technology, particularly in AI infrastructure. 

Earnings before interest, taxes and amortization for its Cloud Intelligence Group stood at 2.34 billion yuan, up 155 percent, according to the report. 

Tencent has also released results for the quarter ended on June 30. Total revenue reached 161.1 billion yuan, up 8 percent year-on-year, while the profit attributable to shareholders rose 82 percent to 47.6 billion yuan. 

The company's domestic games revenue resumed growth while international games revenue accelerated growth, Ma Huateng, chairman and CEO of Tencent was quoted as saying in the release. Tencent's domestic gaming revenue rose 9 percent to 34.6 billion yuan, while international gaming revenue increased 9 percent to 13.9 billion yuan.

Tencent drew 29.9 billion yuan in revenue from online advertising for the second quarter of 2024, up 19 percent year-on-year, primarily driven by increased revenue from video accounts and long-form video, read the release. 

The financial results released by internet firms reflected China's strengths in the digital economy, showcased by strong innovative capability, growing market demand, solid policy backing and a relatively complete ecosystem, said Wang Peng, an associate research fellow at the Beijing Academy of Social Sciences. 

Rising AI technologies remain a significant driver propelling the firms' development, as AI will become an operational necessity for Chinese companies and help enterprises lower costs with elevated efficiency, Liu Dingding, a veteran industry observer, told the Global Times on Monday.

The performances posted by the leading Chinese internet giants refuted the Western hype of China's "crackdown on the private economy." Experts noted that the policy backing for the private economy from the central departments to localities will continue contributing to the sector's healthy development while further spurring the growth of domestic internet companies. 

Supporting the healthy development of private enterprises will stimulate the country's market vitality, promote industrial upgrading and transformation, and create a fairer competitive environment for internet companies with broader development potential, Wang told the Global Times on Monday. 

Liu highlighted the corresponding measures supporting the development of AI and related infrastructure construction as another significant source of support for technological advancement. 

China will step up efforts to boost the development of the private sector, according to a State Council report in June, the Xinhua News Agency reported. The report said that China's comprehensive national strength, deepened reforms, and sci-tech and industrial revolutions have provided the foundation, impetus and opportunities for the growth of the private sector. 

It noted that the private sector still faces challenges regarding market access, supply of services and business management, and it listed six priorities for promoting the development of the private sector, such as optimizing the environment for the development of the private economy and increasing credit support for private enterprises.