Alibaba Announces $28 billion Cloud Investment
Alibaba Group Holding Ltd said it will invest 200 billion yuan ($28 billion) in its cloud infrastructure over three years, following a boom in demand for business software as the coronavirus outbreak peaked in China.
The company said it will spend the funds on semiconductor and operating system development as well as building out its data centre infrastructure.
Alibaba is the dominant cloud player in China. The company saw usage surge for its software, most notably DingTalk, a workplace chat app used by both businesses and schools.
Alibaba Cloud Intelligence president Jeff Zhang said in the statement that the COVID-19 pandemic “has posed additional stress on the overall economy across sectors” and the company hoped the investment would help businesses “speed up the recovery process”.
Alibaba commanded 46.4% of China’s cloud market in the fourth quarter, according to research firm Canalys. Tencent Cloud and Baidu Cloud, which have also seen demand for their products surge, had 18% and 8.8% of the market respectively.