Alibaba CEO Eddie Wu has announced plans to build a global cloud network following the company’s commitment of over 380 billion yuan (approximately $52.7 billion) to enhance computing and AI infrastructure in China.
According to the company, Alibaba Cloud will focus on expanding into international regions like Japan, South Korea, Southeast Asia, the Middle East, Europe, and the Americas. The goal, according to the company, is to provide consistent AI infrastructure services for Chinese enterprises both domestically and internationally.
Presently, the Alibaba Cloud service operates across 87 zones, with the service cutting across 29 regions. It offers 394 cloud computing and AI products along with 59 technical services, making it one of the largest cloud service providers in the Asia Pacific region.
Alibaba plans global cloud expansion amid fierce competition
The recent 380 billion yuan ($52 billion) investment to push its global expansion is coming at a critical time in the global cloud computing landscape. Presently, the company holds just 4% of the market share, compared to Microsoft Azure’s 20%, Google Cloud’s 12%, and AWS’ 31%.
The global cloud market has been predicted to surpass $912 billion by 2025, with the market presently growing at 18.3% annually.
According to analysts, the global market is also expected to open up opportunities and intense market share competition. This expansion is also moving as the industry forecasts show 95% of the new digital worlds will be deployed on cloud-native platforms by 2025, signalling a shift in how businesses will operate globally.
Presently, Alibaba has an existing network of 87 availability zones across 29 regions, securing its position as the leader in the Asia-Pacific region. However, this new investment signals the firm’s ambition to challenge Western firms for dominance in the international markets.
The global expansion is also in line with the wider trends in the industry, as 76% of businesses are now choosing hybrid or multi-cloud approaches to optimize workloads and avoid vendor lock-in.
Supporting the global expansion of Chinese enterprises
According to Wu’s statement, the push for global expansion will provide an inevitable pathway for Chinese enterprises. This shows that the Alibaba CEO feels there is a growing need for Chinese firms to gain access to reliable, familiar technical infrastructure as they continue to expand internationally.
Alibaba is set to address this need using its Cloud services, providing consistent AI infrastructure services for Chinese firms operating across borders. This way, they can eliminate technical challenges.
The investment will also create a technological foundation for Chinese companies to compete globally while adhering to different regional regulations, addressing a challenge that has always hindered international expansion.
Using this infrastructure as its backbone, Alibaba wants to position itself as the go-to cloud provider for Chinese firms attempting to take their services global, potentially capturing more market share as they expand their international operations.
The move is also in line with China’s goal of being the global AI leader by 2030, providing the infrastructure needed for AI development. China’s core AI industry was valued at $75 billion in 2022, with over 4,300 AI firms forming a strong ecosystem that relies on cloud computing resources. By doing so, this investment will fill an important gap as Chinese AI models currently lag behind their United States counterparts, according to competitive analysis.
The infrastructure buildout is also important, considering that Chinese companies develop large language models to rival Western offerings, requiring a large amount of computing resources that only advanced cloud networks can provide.
By strengthening its global cloud presence, Alibaba is also creating a foundation for Chinese AI firms to deploy their solutions internationally while maintaining technical consistency across different regions.
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