Alibaba’s cloud services unit expands business with China’s data exchanges under major new deal in southern tech hub Shenzhen

Alibaba Cloud and Shenzhen Data Exchange enter cooperation deal that included data infrastructure construction and large-scale model applications
Before that tie-up, Alibaba Cloud was working with several exchanges such as those in home city Hangzhou and Guiyang in southwest Guizhou province

Alibaba

Tracy Quin Shanghai

Published: 6:30pm, 24 Apr, 2023

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Alibaba Group Holding’s cloud computing services subsidiary has entered into a pact to collaborate with the state-run data exchange in Shenzhen, China’s southern tech hub, in a move that is expected to bolster how companies buy and sell data in line with the country’s digital economy expansion plans.

Alibaba Cloud and Shenzhen Data Exchange signed a cooperation framework agreement during a recent meeting in Hangzhou, capital of eastern Zhejiang province, according to an article published by the Alibaba subsidiary on Sunday. Alibaba owns the South China Morning Post.

Their collaboration’s coverage included data infrastructure construction, data ecology, exploration of large-scale model applications and other areas to promote commercial information exchange, according to the article.

The tie-up between Alibaba Cloud and Shenzhen Data Exchange underscores the urgency of China’s effort to apply commercial rules to create a major domestic market for trading data, which is regarded by Beijing as a production factor that is in the same category as land, capital and human labour.

The state-run Shenzhen Data Exchange was formally established on November 15, 2022, and started trading on the same day in the southern tech hub. Photo: Xinhua

Shenzhen Data Exchange started trading in November last year, ahead of the launch of Shanghai’s data exchange in December. Shenzhen’s neighbour Guangzhou, capital of southern Guangdong province, launched its own exchange in September last year.

As of August last year, more than 40 data exchanges have been established or are being planned, according to an article published by the State Information Centre in September.

Before the deal with Shenzhen Data Exchange, Alibaba Cloud was already working with several clients in the same sector, including Hangzhou International Digital Exchange Centre and Guiyang Big Data Exchange in the capital of southwest Guizhou province.

Cloud computing services enable companies to buy, sell, lease or distribute a range of software and other digital resources as an on-demand service over the internet, just like electricity from a power grid. These resources are managed inside data centres.

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Huang Haiqing, China president at Alibaba Cloud Intelligence, said the company’s collaboration with Shenzhen Data Exchange would be extensive, ranging from big data and cloud computing to artificial intelligence services.

In 2022, Alibaba Cloud remained the top cloud infrastructure services provider in mainland China, with a 36 per cent share of the market’s US$30.3 billion overall revenue that year, according to research firm Canalys. It ranked Alibaba Cloud ahead of the rival cloud services units of Huawei Technologies Co, Tencent Holdings and Baidu in the same period.

Under e-commerce giant Alibaba’s sweeping reorganisation of its US$257 billion tech empire, the firm’s Cloud Intelligence Group will become one of six independently run entities. Daniel Zhang Yong, Alibaba’s chairman and chief executive, took over control of Alibaba Cloud last December after a major service outage in Hong Kong and Macau.

Alibaba Cloud has recently seen a dip in sales. The firm posted a 3 per cent year-on-year revenue increase to 20.18 billion yuan (US$2.92 billion) in the three months ended December 31 to mark its slowest growth last year, when sales grew as high as 12 per cent in the March quarter and 10 per cent in the June quarter.

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