Alibaba to pour US$28 billion into cloud computing after pandemic
The ecommerce giant is investing in operating systems, servers, chips and networks in the wake of the Covid-19 crisis as competition from Tencent and Baidu heats up
Alibaba Cloud, the data intelligence backbone of Chinese ecommerce giant Alibaba Group, will invest an additional 200 billion yuan (US$28.2 billion) in the next three years on its cloud infrastructure to help speed up the digital transformation of businesses in China following the Covid-19 pandemic.
Aimed at next-generation data centers, the investment will focus on technologies including operating systems, servers, chips and networks, according to a company statement on Monday.
“The Covid-19 pandemic has posed additional stress on the overall economy across sectors, but it also steers us to put more focus on the digital economy,” said Jeff Zhang, president of Alibaba Cloud Intelligence. “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.”
The coronavirus outbreak has already accelerated many of the digital and technology trends already under way in China, from online health and education to remote workplace services. To help combat the health crisis, Chinese cloud companies including Alibaba Cloud, Tencent Cloud and Baidu Cloud, have provided access to on-demand cloud computing and artificial intelligence (AI) services to support government departments, businesses, research institutes and students during the pandemic.
Alibaba Cloud made its AI-powered platform available for free to research institutions to accelerate CT image analytics, gene sequencing and related services to treat and prevent the novel coronavirus. Tencent Cloud also made its platform available to research teams from universities across the country. It launched a cloud office portfolio to support remote working, which includes Tencent Meeting, WeChat Work, QQ and Tencent Doc.
Baidu AI Cloud made its online doctor consultation platform free for any medical queries and its platform, Wenyisheng (which translates to “Ask Doctor”) handled around 850,000 domestic inquiries daily in March, according to a Canalys research report. Similarly, Baidu AI Cloud opened its platform and AI algorithms for free to research institutions, while it developed mapping tools to track the initial spread of the virus to aid local response efforts.
Cloud infrastructure services spending in China increased by 63.7 per cent to exceed US$10.7 billion in 2019, and the outlook for 2020 is “positive” as organisations look to shift more applications to the cloud, according to a March Canalys report.
“The benefits of cloud computing were showed by the leading cloud service providers in response to the escalating coronavirus crisis,” said Yih Khai Wong, senior analyst from Canalys in the report. “They rapidly deployed continuity measures for organisations and established resource-intensive workloads to analyse vast data sets.”
With data centers across 21 regions, Alibaba Cloud was ranked number one, accounting for 46.1 per cent of the Chinese market last year, followed by Tencent Cloud, Amazon Web Services and Baidu AI Cloud, the Canalys report said.
Alibaba is the parent company of the South China Morning Post.
(Abacus is a unit of the South China Morning Post.)