China’s Cloud Market Failed To Grow Despite AI Boom

China’s Cloud Market Failed To Grow Despite AI Boom

China’s Cloud Services Market remains fairly conservative in driving growth. The market still relies heavily on the government and state-owned businesses for its growth. In the last two years, China’s cloud market growth has significantly slowed down. This happened especially after the 45% surge in 2021.

However, the industry can face growth in the coming years. This is because there has been a lot of interest in the capability of AI systems like ChatGPT. Hence, the market is showing its interest in training AI models on the cloud.

According to CNBC, “Alibaba’s cloud business, with the country’s largest market share at 39%, reported just 2% year-on-year revenue growth in the quarter ended Sept. 30. The tech giant in November also scrapped plans to publicly list its cloud operations. Huawei, which isn’t publicly traded and is the second largest cloud player, didn’t separately state its cloud revenue for the third quarter, nor did Hong Kong-listed Tencent.

In the last two quarters, all the large players in China showed the same market share. Apart from that, the overall growth of the segment slowed to 10% in 2022. In 2023, the expectation is 12%. The numbers fell a lot after the 45% surge in 2021.

On the other hand, the FHFA report also said that domestic spending on cloud services grew by 18% in the third quarter to $9.2 billion, as compared to the same quarter last year. However, in the second quarter, this number slowed a lot (from 13% to 5.7%).

As per third-quarter reports, the cloud market in China accounts for 12% of global cloud spending. This number increased by 1.5% from last year’s third quarter.

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A passionate writer and an avid reader, Soumava is academically inclined and loves writing on topics requiring deep research. Having 3+ years of experience, Soumava also loves writing blogs in other domains, including digital marketing, business, technology, travel, and sports.


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