Alibaba Group Holding’s BABA cloud unit is rapidly expanding its global footprint, recently establishing its third data center in Malaysia and planning a second in the Philippines for October.
This strategic expansion aligns with CEO Eddie Wu’s declaration that globalization is a core long-term strategy for Alibaba Cloud, as shared with Bloomberg on Wednesday.
The company is also committed to accelerating AI adoption, evidenced by its plans to launch a global competency center in Singapore. Reportedly, Alibaba Cloud is China’s largest cloud service provider, with over one-third of the market.
Also Read: Alibaba Expands AI Cloud Footprint In South Korea With New Data Hub Launching In June
This initiative complements its ongoing efforts to build AI systems with human-level intellectual capabilities, a priority Wu outlined in February.
Further cementing its AI ambitions, Alibaba will open a second data center in South Korea by June 2025 and aims to extend its Qwen AI models and Model Studio to international data centers by 2025.
Alibaba plans a significant expansion of its global cloud network over the next three years, targeting China, Japan, South Korea, Southeast Asia, the Middle East, Europe, and the Americas.
This will add to its 29 existing data centers worldwide, which currently include locations in the U.S., London, Dubai, and mainland China, and builds on prior infrastructure investments in Thailand, Mexico, and South Korea.
This push for international growth is also influenced by China’s domestic antitrust crackdown and escalating geopolitical tensions with the U.S., including semiconductor embargos and tariffs.
To fuel this growth, Alibaba has committed at least 380 billion yuan ($52 billion) to cloud computing and AI infrastructure over the next three years, and is forging key partnerships with companies like Microsoft Corp. MSFT, Siemens, and Nvidia Corp. NVDA for AI collaborations.
This expansion and investment come as Alibaba’s stock has surged over 34% year-to-date, indicating a return to growth driven by its cloud unit, strategic restructuring, and renewed investor confidence in the Chinese tech sector.
The emergence of Chinese AI startup DeepSeek and its claims of affordable AI models in 2024 fueled a domestic price war, prompting Chinese Big Tech companies like Alibaba to roll out affordable AI models.
In May, Alibaba reported that its fourth-quarter revenue grew 7% year-over-year to $32.58 billion, which missed the analyst consensus estimate of $33.08 billion. Despite this, its Cloud Intelligence Group showed strong performance, with revenue growing 18% year-over-year to $4.15 billion.
Price Action: BABA shares are trading lower by 1.75% to $111.97 premarket at last check Wednesday.
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