China’s cloud market growth plateaus despite big AI push

Chinese cloud computing services have yet to see the much-anticipated boost from artificial intelligence (AI), as sales growth plateaued in the third quarter despite heavy AI investments and product roll-outs this year.

Revenue from cloud infrastructure services in mainland China grew 18 per cent year on year to US$9.2 billion in the third quarter of the year, accounting for 12 per cent of global cloud spending, according to a report published on Wednesday by market consultancy Canalys.

Alibaba Cloud, Huawei Cloud and Tencent Cloud were the top three vendors, accounting for a combined 73 per cent of the market in the third quarter.

Alibaba Cloud, the cloud computing unit of South China Morning Post owner Alibaba Group Holding, led the market with a commanding 39 per cent market share in the period, followed by Huawei and Tencent with 19 per cent and 15 per cent, respectively.

Canalys also noted that Chinese cloud firms still rely heavily on government and state-owned enterprises to drive growth.

The revenue growth of Chinese cloud infrastructure services, defined by Canalys as infrastructure-as-a-service and platform-as-a-service, has levelled off even though local cloud firms have invested heavily to ride the wave of generative AI.