Chinese e-commerce giant, Alibaba, has promised to invest 200 billion yuan (approx. $28 billion) in its cloud computing business to help improve the infrastructure in the next three years.
The cash is meant to help the firm build more data centers, in the next three years as well as invest in the internal development of technologies like AI-inference chips, as it aims to expand its reach globally.
Currently, the firm servers over 21 regions globally. However, the firm has reportedly struggled to keep up with spikes in demand back in February after the lockdown in China.
This affected their businesses negatively, but the cash pump is expected to speed up the recovery process, according to Jeff Zhang, president of the Alibaba Cloud Intelligence division.
“By increasing our investment on cloud infrastructure and fundamental technologies, we hope to continue providing world-class, trusted computing resources to help businesses speed up the recovery process, and offer cloud-based intelligent solutions to support their digital transformation in the post-pandemic world,” Jeff Zhang, president of the Alibaba Cloud Intelligence division, said in the statement.
Alibaba’s cloud computing business is one of the fastest-growing, with the Q4 revenue jumping by 62 pc to 10.7 billion yuan, according to Reuters. The company’s cloud division controlled almost 50 percent of the Chinese cloud computing market in Q4, according to Canalysis.
China’s cloud computing market is anticipated to grow beyond 300 billion yuan ($42.3 billion) by 2023, according to a white paper published late last year by the International Technology and Economic Research Institute of the Development Research Center of the State Council.
In the next three years, over 60 percent of local businesses in China, as well as government agencies, are expected to rely on cloud computing in their daily activities, says the report.