Alibaba’s cloud division announced a significant price reduction on core cloud products, with cuts of up to 55%, as part of a strategic move to drive AI growth across China. The initiative, effective immediately, covers more than 100 product specifications and is aimed at democratizing access to cloud capabilities in the AI era.
Liu Weiguang, President of Alibaba Cloud Intelligence’s public cloud business, highlighted the company’s role as a key player in China and the Asia-Pacific region. “We recognize the immense potential of China’s digital market. Hence, we’ve launched this price reduction campaign to make cloud services more accessible to enterprises and developers. This will enable them to leverage advanced public cloud services and accelerate digital transformation across various industries in China,” Liu stated.
The surge in interest and investments in generative AI, exemplified by OpenAI’s ChatGPT, which launched in November 2022, has driven many companies to explore new possibilities. According to McKinsey’s November 2023 report, generative AI offers significant potential for established companies.
McKinsey analysts noted, “One opportunity lies in leveraging cloud services to support generative AI initiatives. Generative AI requires substantial compute, storage, and networking resources, making cloud scalability crucial. Given its complexity, generative AI is best implemented through scalable enterprise cloud platforms, rather than through isolated experiments conducted by individual development teams.”
Canalys has estimated a 20% increase in global cloud service spending in 2024, compared to 18% in 2023, driven by the widespread adoption of AI applications. “Hyperscalers are significantly increasing their investments in generative AI, anticipating that its capabilities will unlock new opportunities in cloud consumption,” Canalys reported.
Alibaba’s move to reduce cloud prices aligns with these trends, positioning the company to play a pivotal role in driving AI innovation and adoption across China’s dynamic digital landscape.
(Source: Nasdaq | BNN | CNA)
