20240515 Biz spot China AI cloud service main 1

In China, the buzz over AI models was expected to spur a significant increase in demand for AI computing and related services, but the most recent quarterly earnings did not paint the expected rosy picture. (Photo by Reuters) © Reuters

China's cloud service providers are still waiting for AI to make it rain

Alibaba, Baidu and ByteDance battle for customers as a price war weighs on revenue

CISSY ZHOU, Nikkei staff writer

May 17, 2024 06:00 JST

HONG KONG -- China's cloud service providers are racing to turn generative AI hype into real revenue as they struggle for growth in an already crowded market.

In the past few years, players like Alibaba Cloud have faced stagnant growth even as their U.S. counterparts enjoy a boom: In the first quarter, Microsoft's revenue from Azure and other cloud services grew 31%, Google's cloud segment grew 28% and Amazon's cloud unit grew 17%, all buoyed by strong AI demand.