Alibaba Cloud Leads China’s AI Market with 36% Share

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Photo:Reuters

China’s technology world is seeing a big race in artificial intelligence (AI) cloud services, and one company is clearly leading. In the first half of this year, Alibaba Cloud captured more than 35% of the market, leaving its rivals far behind. This means that out of every 100 businesses using AI cloud services in China, more than 35 are choosing Alibaba Cloud.

According to market data, Alibaba Cloud’s share was 35.8%, which is more than the combined share of its three closest competitors. ByteDance’s Volcano Engine was in second place with 14.8%, followed by Huawei Cloud at 13.1%, and Tencent Cloud at 7%. Baidu Cloud stood behind them with 6.1%. This shows that Alibaba is not only the leader but also the strongest player in this fast-growing field.

Market Growth and Future Potential

The demand for AI cloud services in China is rising at an incredible pace. These services include special computing power that helps companies build and run generative AI tools, like chatbots, language models, or image generators.

Analysts predict that the Chinese AI cloud market will more than double in 2025. The market size is expected to grow from 20.8 billion yuan in 2024 to 51.8 billion yuan in 2025 — that’s about 7.3 billion US dollars. From 2025 to 2030, experts expect the industry to keep growing at an average rate of 26.8% every year.

This fast growth means that AI cloud services are becoming as important as electricity or the internet for the future digital economy. Companies, schools, hospitals, and even governments are moving their AI work to the cloud.

Alibaba’s Heavy Investment

Alibaba has been investing huge amounts of money to stay at the top. Earlier this year, it announced a massive capital spending plan of 52 billion US dollars focused on AI and cloud technology.

Alibaba Cloud now runs 89 availability zones across 29 regions worldwide, making it one of the largest cloud networks in the world. In the June quarter alone, Alibaba Cloud reported revenue of 33.4 billion yuan, which was a 26% jump compared to the same time last year. This made it the company’s fastest-growing division, even growing faster than its international online shopping business.

In just the three months leading to June, the company invested 38.6 billion yuan in AI and cloud projects. Over the past year, this spending crossed 100 billion yuan.

Focus on Qwen AI Models

One of Alibaba’s biggest strengths is its Qwen family of large language models. These are advanced AI systems that can understand and generate human-like text, code, and data.

According to the company’s CEO, Eddie Wu Yongming, these open-source Qwen models are attracting many customers. He explained that businesses across China are showing a “booming demand” for both AI training (teaching the models new skills) and AI inference (using the models to answer questions or perform tasks).

Wu also said that customers today prefer technology companies that offer a full set of tools — not just AI models, but also cloud servers, databases, developer platforms, and security. Alibaba’s wide range of products makes it attractive to clients who want everything in one place.

Rapid Increase in AI Usage

Reports show that in just the first half of this year, the daily use of AI tokens in China jumped more than four times compared to the previous six months. Tokens are the small units of text or code that AI systems use to process information.

Among all AI models in China, Alibaba’s Qwen series had the largest share of usage with 17.7%, followed by ByteDance’s Doubao with 14.1%, and DeepSeek with 10.3%.

This shows that not only is Alibaba leading in market share, but it is also winning when it comes to actual usage of its AI tools.

Why This Matters

The AI cloud race in China is more than just a business story. It reflects how technology is shaping the country’s future. With strong growth expected for the next decade, companies that dominate this space will control critical digital infrastructure.

For businesses, choosing the right AI cloud provider means getting faster, cheaper, and more powerful AI services. For China, this leadership in AI cloud services strengthens its digital economy and helps it compete globally in technology.

Alibaba Cloud, AI market, China technology