China’s Alibaba Cloud on Monday said it will cut prices for products that are powered by its offshore data centers by as much as 59% amid rising competition to attract artificial intelligence software developers. The cloud service provider said products related to computing, storage, network, database and big data will receive an average of a 23% price reduction. This is the third time the cloud arm of Chinese e-commerce leader Alibaba Group Holding (9988.HK), opens new tab has moved to cut prices over the last 12 months. In February, Alibaba had already announced a similar price cut programme aimed at domestic users. The price cuts mark Alibaba’s latest effort to lure developers to build data-intensive AI models and applications using its cloud services. The move coincides with a surge in demand for cloud computing to support a global boom in AI development, as well as a complicated internal restructuring. Chief Executive Officer Eddie Wu is spearheading a far-reaching overhaul to try and revitalize Alibaba’s main businesses including ecommerce. Alibaba canceled plans for a public listing of the cloud business in November, citing difficulties getting the high-end Nvidia Corp. chips it needs to compete, and has faced rising competition from Tencent Holdings Ltd. and state-backed providers. The Hangzhou-based firm slashed prices on Monday by an average of 23% for around 500 cloud product specifications. Those discounts are now available to customers in 13 regions, including Japan, Indonesia, the United Arab Emirates and Germany. The company’s shares in Hong Kong pared gains after the announcement to trade about 0.5% up. Alibaba is China’s biggest cloud service provider, but a relatively small player compared to global leaders Amazon.com Inc. and Microsoft Corp. It has lost market share in China to state-backed rivals and struggled to gain any ground abroad in recent years as a crackdown on internet firms in China and US trade curbs hampered its expansion. Revenue at the cloud division, which surpassed $11 billion in its last full fiscal year, is projected to slip 2% in the March quarter. Chairman Joe Tsai acknowledged in an interview with major shareholder Norges Bank last week that US chip curbs posed a “big issue” for Chinese cloud providers. While stockpiled inventories can still be used to train large language models for the next 12 to 18 months, limited access to Nvidia’s best-in-class AI hardware will impact the companies in the short to medium term before there are strong domestic alternatives, Tsai said.
Alibaba Cloud slashes prices globally as AI demand quickens
