By South China Morning Post | Created at 2025-03-27 09:27:03 | Updated at 2025-03-30 14:32:54
3 days ago
Cloud infrastructure services spending in mainland China, which grew 13 per cent last year, is set to further accelerate with a 15 per cent increase in 2025 driven by DeepSeek’s momentum that has triggered rapid adoption of artificial intelligence (AI), according to Canalys.
Cloud spending, which totalled US$40 billion in 2024, is expected to reach US$46 billion this year as leading cloud providers such as Alibaba Group Holding, Huawei Technologies and Tencent Holdings have all announced plans to expand their investments.
The launch of DeepSeek’s R1 model in January “has redefined the benchmarks for AI foundation model performance and cost, accelerating enterprise adoption of AI and driving profound changes across the cloud services value chain”, said Rachel Brindley, senior director at Canalys.
The surge in demand preceded the DeepSeek frenzy, as cloud providers in the fourth quarter of 2024 reported “robust customer demand, though growth continued to be constrained by supply-side limitations”, according to Canalys.
This year, major cloud developers have all vowed to increase spending. Alibaba, the leader with a 36 per cent market share in the fourth quarter, has pledged to invest 380 billion yuan (US$52.4 billion) in computing resources and AI infrastructure over the next three years, more than the company’s total investment in these areas in the past decade. In February, it opened new data centres in Thailand and Mexico. Alibaba owns the South China Morning Post.
