Alibaba pledges $1 billion to cloud computing customers to reignite growth

Alibaba has faced growth challenges amid tighter regulations in China’s tech sector and a slowdown in the world’s second-largest economy. But analysts believe the e-commerce giant’s growth could accelerate through 2022.

Kuang Da | Jemian News | CGV | Getty Images

Alibaba said it would invest $1 billion over the next three fiscal years to support its cloud computing customers as the Chinese e-commerce giant seeks to revive growth after a historic slowdown.

The investment consists of “financial and non-financial incentives, such as funding, rebates and go-to-market initiatives,” Alibaba said in a press release Thursday.

The company said it is also implementing a program to help its customers locate their cloud computing business needs based on the market.

According to Gartner, Alibaba is the world’s third largest cloud computing player behind Microsoft and Amazon. Although cloud computing currently represents only a small part of Alibaba’s overall business, the company’s management sees it as a critical component of future growth and profitability.

However, Alibaba has seen an unprecedented slowdown in growth amid China’s economic malaise due to the resurgence of Covid in the world’s second-largest economy and a tighter domestic regulatory environment. In the April-June quarter, Alibaba saw its first consistent revenue growth.

Revenue growth from its cloud computing business also slowed from the previous quarter.

Alibaba’s investment announcement is also part of a broader push by the Hangzhou, China-based company to expand its cloud computing business overseas.

In recent years, Alibaba has opened new data centers outside of China to win customers in other markets such as Singapore and Thailand.

Leave a Reply

Your email address will not be published.