Alibaba Cuts Prices of Core Cloud Products by 55%

There is intensifying competition in China’s cloud computing market as several large Chinese competitors have announced price reductions on their primary offerings. Alibaba Cloud, the cloud computing division of Alibaba Group Holding Ltd. Announced the largest price cut in the company’s history, on more than 100 core products. The goal of the move is to accelerate the adoption of cloud computing across all industries and to make public cloud services more inclusive and accessible in the age of artificial intelligence. 

Alibaba Cloud’s move to lower product costs coincides with a global increase in interest in and investments in artificial intelligence (AI), as the training of large language models driven by AI demands a significant amount of processing power. Alibaba Cloud’s pricing reductions, highlight the company’s dedication to accelerating the uptake of AI technologies and bolstering the rapidly changing environment. In the third quarter of 2023, mainland China’s spending on cloud infrastructure services increased by 18% year over year to $9.2 billion, making up 12% of the world’s total cloud spending. Alibaba Cloud lead the cloud infrastructure market with 39% of all industry investment.

This change will draw in new users while retaining current ones and lower the cost of cloud computing services for small and medium-sized businesses. Alibaba’s cloud computing business generated 28.07 billion yuan in revenue from October to December, up 3% from the previous year. Cloud computing is becoming a more significant part of Alibaba’s overall business strategy. Presently, 80% of the mainland’s technological companies, including 50% those engaged in the creation of large language models (LLMs) use Alibaba Cloud’s services to support their operations.

Tencent Holdings and Huawei Technologies have also followed suit, cutting prices and creating new promotions to attract more customers amid increasing competition in the industry. 

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