Hong Kong-listed shares of Alibaba jumped in Monday trade as AI-related sales surged, driving a strong quarter for its cloud division. Sources also told CNBC the company is working on a new AI-focused chip, in an attempt to boost development of domestic semiconductors.

Alibaba's shares in Hong Kong have experienced a significant increase, rising by 18%, despite the company's revenue growth falling short of expectations. The boost in share price is attributed to robust performance in Alibaba's cloud computing and AI-related businesses, which posted triple-digit year-over-year growth and exceeded profit forecasts. 

The company is actively developing a new chip designed for AI applications, aiming to strengthen China's domestic semiconductor industry. This move comes as Alibaba seeks to diversify beyond its traditional e-commerce operations, which have faced intense competition and pricing pressures. Investors appear encouraged by Alibaba's strategic shift toward technology and AI, positioning the company as a key player in China's evolving tech landscape.

Alibaba stock surges amid AI boom

Hong Kong listed shares in Alibaba are surging. What are we now? Let's have a look. We are 18% higher, despite a weaker than expected 2% increase in revenue on the year in the June quarter. The company hailed the expansion of its cloud computing unit and said that AI-related revenue maintained triple-digit year-over-year growth, as it posted a beat on the bottom line. The results come as the company works to develop a new chip designed for AI applications, according to two people familiar with the matter. Speaking with CNBC, the latest move is an attempt to boost Chinese development of the domestic semiconductor market. Well, it was all related. Those SK Hynix stories and this one from Alibaba, it's all related. It's a question of how much the US feels it needs to curtail the Chinese-based development of the technology, the infrastructure, the chips themselves, the software, based on that as well, in order to maintain a preeminent position. And we've had some brilliant debates on this channel about whether actually curtailing encourages autarky, substitution, or actually it's the right thing to do. If you think about the motivation for homegrown talent as well, it would curry favor with the local authorities if they could come up with some sort of chip that was a contender to NVIDIA. You saw the flag flying around DeepSeek, the technology breakthroughs around AI from the Chinese. Imagine that from a chip perspective. So there is certainly the motivation to do so. In terms of the contenders, it's not just Alibaba. There are others as well. I mean, this Alibaba chip, it's more versatile. So again, not one chip will fit all solutions. The fact that the Chinese are trying everything, Cambricon has been the one that's gathered a lot of motion recently. But the other one, MetaX, this is a Shanghai company. It's got a bigger memory than the H20 on offer, but it is a bit more energy intensive. So I think you're going to see a number of homegrown solutions. And then as we talk about something being more energy intensive, there are ways to solve that equation too. So I think you'll see a lot of hacks and workarounds in the Chinese chip industry. I think for Alibaba specifically, when you think about the share price reaction today, investors clearly encouraged by Alibaba's move to try to reposition itself as an AI play, given all the pressures it's been facing in its e-commerce division. Obviously, the original bread and butter of the business, but we know that they've been in a price battle with competitors, with MetaOne, with JD.com. There's been a really destructive pricing environment. So to see them getting growth from their cloud computing unit and their AI related businesses, as opposed to e-commerce, I think that's really encouraging for the long-term for this company, that they are trying to hedge their bets and become a key player in the tech stack, which to your point, Steve, is becoming so important and not just a retail company. The interesting part is whether the chip sector semiconductors will stand alone to some of the other overcapacity fears elsewhere, because I was talking earlier with one of our guests about a crackdown from the Chinese about overcompetitive pricing and overcapacity, that they're trying to address that. But it seems as though the race is on to come up with some sort of chip that is the Nvidia contender. And obviously, the Huawei option is the front runner so far, but they haven't quite cracked it. And the question is whether someone can leapfrog past Huawei and come up with something better that is truly an Nvidia challenger. And that's what we're going to be looking out for, because it would well and truly bring, I think, the resilience to the supply chain around AI for China, if they could absolutely crack the chip story.

The U.S. military struck a drug-carrying boat hailing from Venezuela, Secretary of State Marco Rubio said, as tensions spike between the Trump administration and the Venezuelan government. Charlie D'Agata has more.

Caracas

U.S. military strikes drug-carrying boat from Venezuela, Rubio says

The House Oversight Committee on Tuesday released over 33,000 pages of documents related to sex offender Jeffrey Epstein.

Washington

33,000 pages of Jeffrey Epstein documents released by House panel

Belgium joins the ranks of Australia, France, Canada and the UK, all who have pledged to recognize a Palestinian state at the UNGA next week in a bid to ramp up pressure on the Israeli government to end the war in Gaza.

Brussels

Middle East Conflict

Belgium to recognize Palestine at the UN General Assembly

A powerful 6.0 magnitude earthquake in eastern Afghanistan killed at least 1,400 people, according to the Afghan Red Crescent Society. Thousands more were  injured.

Kunar

At least 1,400 killed in powerful Afghanistan earthquake

The death toll from Afghanistan's worst earthquake in years jumped to over 1,100 with thousands more injured, as difficult terrain hindered rescue efforts in isolated villages of the country's mountainous eastern region.

Taliban appeals for aid after quake kills over 1100 in Afghanistan

The leaders of Russia, China and India showcased a renewed commitment to co-operation on the second day of the Shanghai Cooperation Organization summit. Analysts says the friendliness is designed to project an unified alternative to the West.

Tianjin

Russia, China, India tout renewed co-operation

A plane carrying European Commission President Ursula von der Leyen was disrupted by jamming that authorities suspect was the result of Russian interference in Bulgaria.

Plovdiv

Von der Leyen's plane affected by alleged Russian GPS jamming

The world's leading genocide scholars' association has passed a resolution saying that the legal criteria have been met to establish Israel is committing genocide in Gaza, its president said on Monday (September 1).

Jerusalem

Israel committing genocide in Gaza, scholars' association says

Chinese President Xi Jinping and Russian President Vladimir Putin outlined a new global security and economic order at a regional summit on Monday (September 1), as India and Russia continued to express strong ties between their nations.

China's Xi, Russia's Putin share vision for new global order

A devastating 6.0 magnitude earthquake struck eastern Afghanistan late Sunday, killing more than 800 people and injuring hundreds more, officials said. CBS News senior foreign correspondent Holly Williams reports.

Kabul

Powerful earthquake in Afghanistan kills hundreds, destroys villages

Iran-backed Houthis raided offices of the United Nations’ food, health and children's agencies in Yemen’s capital, detaining several UN employees, officials said. The rebels tightened security across Sanaa following the Israeli killing of their prime minister and several Cabinet members.

Sana'a

Houthis raid UN offices in Yemen, detain 11 employees

A large buildup of U.S. naval forces in and around the Southern Caribbean has officials in Caracas and experts in the United States asking: is the move aimed at combating drug cartels, as the Trump administration has suggested, or is it for something else entirely?

U.S. builds up forces in Caribbean as officials, experts concerned

Officials from the Trump administration spent the weekend pushing back against a U.S. appeals court ruling that most tariffs against Canada were illegal. Economic adviser Peter Navarro called the decision politically motivated.

Global Tariffs

Trump officials push back after court rules tariffs illegal

Israel's security cabinet is considering a plan to seize Gaza City with attacks ramping up over the weekend. The Israeli military has now ended a temporary pause of military action around aid delivery locations ahead of an expected 'full-scale assault'.

Tel Aviv-Yafo

Israel intensifying attacks ahead of planned seizure of Gaza City

Illinois Gov. JB Pritzker says he's making every effort to stop President Trump from using the military to "invade states." But the White House claims the National Guard is needed to stop violent crime in Chicago.

Chicago

Trump threatens to send military to Chicago over crime

A young boy who had wandered away from his parents ended up on a closed monorail at Hersheypark in Pennsylvania this weekend. A bystander helped rescue the boy as a gathering crowd cheered. It's not clear how he made his way onto the monorail.

Hershey

Boy rescued from monorail track at Pennsylvania amusement park

A flotilla of boats carrying humanitarian aid for Palestinians in Gaza, has set sail from Barcelona. On board are organisers from 44 countries, who say they're trying to break Israel's siege on the Strip.

Barcelona

Greta Thunberg onboard second aid flotilla heading for Gaza Strip

Indian Prime Minister Narendra Modi said New Delhi was committed to improving ties with China in a key meeting with President Xi Jinping, as the two leaders discussed the need to expand trade and investment ties against the backdrop of U.S. tariffs.

Beijing

Modi meets with Xi, vows to improve China ties

Pakistan's eastern Punjab province is facing one of the worst flood emergencies in recent history. Authorities say raging waters have affected the lives of more than 2 million people.

Punjab

Pakistan's Punjab province battered by historic flood

China’s Xi Jinping has welcomed Russia’s Vladimir Putin, India’s Narendra Modi and leaders from around 20 countries to the Shanghai Cooperation Organisation summit, a high-security gathering aimed at boosting Beijing’s influence and promoting "a multipolar world order."

Xi aims to show global south unity with Modi and Putin

Russia's Vladimir Putin is among a dozen leaders attending the regional security summit, which comes at a crunch moment in talks over his war on Ukraine, and for a summit that's demonstrating a strong show of unity among Global South leaders.

Putin arrives in China for key regional security summit

Chicago Mayor Brandon Johnson detailed his plan Saturday to resist President Trump's threatened immigration crackdown in his city. CBS News has learned the Trump administration plans to intensify immigration enforcement in the city as early as next week.

Chicago mayor pushes back on Trump's immigration crackdown

Russian strikes shook the Zaporizhzhia region in southern Ukraine overnight Friday, hitting a five-story apartment building, killing at least one person and injuring dozens more.

Zaporizhzhia

Russia continues assault on Ukrainian cities

For the first time since this week's deadly mass shooting at a Minneapolis church, which killed two young students and wounded more than a dozen people, a devastated community gathered Saturday at the site to attend Mass.

Minneapolis

Mass held at site of Minneapolis church shooting

The United States says it will not allow Palestinian Authority President Mahmoud Abbas to travel to New York next month for a United Nations gathering of world leaders, where several U.S. allies are set to recognise Palestine as a state.

New York

U.S bars Palestinian leadership from attending UN

The Department of Homeland Security is preparing for an immigration crackdown in Chicago as early as next week, sources told CBS News. Illinois Gov. JB Pritzker blasted the Trump administration's plans.

Chicago immigration crackdown could happen next week, sources say

The Israeli military on Friday declared Gaza City a “dangerous combat zone” before a new offensive in the Palestinian enclave's largest city. Israel is moving forward with plans to seize Gaza City despite growing international pressure to end the nearly two-year conflict.

Israel declares Gaza City a 'dangerous combat zone'

Palestinian Authority President Mahmoud Abbas has been blocked from attending the UN General Assembly in New York next month. That's as U.S. Secretary of State Marco Rubio has cancelled visas for the Palestinian delegation.

U.S. blocks Palestinian officials from attending UN general assembly

The death toll of a devastating Russian air assault in Kyiv earlier this week has been revised upward to 25. Now European allies suggest Russian President Vladimir Putin is playing U.S. President Donald Trump if he runs out the clock on Washington's peace efforts.

Breakdown