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China Cloud Spending Surges to USD 11.6 Billion in Q1 on AI Boom

  • Jul 11, 2025
  • 2 min read

China’s cloud infrastructure services spending reached USD 11.6 billion in the first quarter, marking a 16% year-on-year increase driven by rising demand for artificial intelligence (AI) capabilities, according to research firm Canalys.



Alibaba Group Holding led the market with a 33% share, followed by Huawei Technologies at 18% and Tencent Holdings at 10%.


Alibaba’s cloud unit posted a 15% revenue increase, while Huawei saw an 18% rise. Tencent’s growth was limited due to graphics processing unit (GPU) supply constraints and prioritisation of internal AI operations.



The surge in spending reflects strong domestic demand for cloud infrastructure, even as providers face US export restrictions on advanced data centre chips.


Canalys senior analyst Yi Zhang said leading providers are building AI ecosystems through model open-sourcing and AI agent platforms to accelerate task execution.


Cloud computing services allow companies to access digital resources on demand via the internet, managed within data centres.


Partner-driven cloud revenue made up 25% of the mainland market in the first quarter, a share Canalys expects to grow as ecosystem collaboration becomes key to converting AI capabilities into business value.


Rachel Brindley, a senior director at Canalys, noted that organisations previously reliant on on-premises data centres are now migrating to the cloud to support AI workloads.


China’s cloud services spending totalled USD 40 billion in 2024 and is projected to reach USD 46 billion in 2025.


Alibaba CEO Eddie Wu Yongming reaffirmed the company’s commitment to building a unified global cloud network, following a three-year, 380 billion yuan (USD 52 billion) investment plan for computing and AI infrastructure.


China Mobile, China Unicom and China Telecom have also pledged increased cloud infrastructure investments to support enterprise clients.

  • China’s Q1 cloud spending rose 16% to USD 11.6 billion

  • Alibaba led with 33% market share, followed by Huawei and Tencent

  • AI demand is driving cloud adoption and infrastructure growth


Source: SCMP

 
 
 

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