China’s cloud computing sector is on track for substantial expansion in 2025, driven by increased investments from major technology firms and a surge in demand for artificial intelligence capabilities. Industry projections indicate that the public cloud market in China is expected to reach $74.13 billion in 2025, with Infrastructure as a Service leading the segment.
In the third quarter of 2024, spending on cloud infrastructure services in mainland China grew by 11% year-over-year, totaling $10.2 billion. This growth marks a return to double-digit increases, highlighting the sector’s resilience and upward trajectory.
Leading Chinese tech companies are making significant investments to bolster their cloud and AI infrastructure. Alibaba Cloud, for instance, announced a $52.6 billion investment over three years to enhance its cloud computing and AI capabilities. Similarly, Meituan has committed billions toward acquiring chips for AI model training, underscoring the competitive drive among Chinese firms to advance in the AI arena.
Despite these aggressive investments, concerns about potential overcapacity in AI data centers have emerged. Alibaba Chairman Joe Tsai cautioned about a possible bubble in AI data center construction, noting that substantial investments are being made without guaranteed future demand. He highlighted that major tech companies are investing heavily in AI infrastructure, which may not be justified by future needs.
In the global context, Chinese cloud providers are expanding their presence overseas. Alibaba Cloud, for example, launched its first data center in Mexico, marking its entry into the Latin American market and reflecting a broader strategy to extend its global footprint.
While China’s cloud market is experiencing robust growth, it still trails behind global leaders. In the fourth quarter of 2024, worldwide cloud infrastructure services spending reached $86 billion, with Amazon Web Services maintaining a 33% market share. In comparison, Alibaba Cloud held approximately 4% of the global market during the same period.
