Alibaba To Make US$28 Billion Cloud Computing Investment


By Catherine Sbeglia

In response to the ongoing COVID-19 pandemic, which has heightened demand for cloud computing services and technology, Chinese company Alibaba revealed that it will invest 200 billion yuan (US$28.26 billion) in its cloud computing division over the next three years.

Specifically, the company said that the funds will go towards infrastructure and technologies related to operating systems, servers, chips and networks.

In a statement, president of Alibaba Cloud Intelligence, Jeff Zhang spoke in more detail about the motivation behind the investment: “The COVID-19 pandemic has posed additional stress on the overall economy across sectors, but it also steers us to put more focus on the digital economy.”

While Alibaba is the biggest cloud computing provider by market share in China, it has not get matched U.S. rivals Amazon and Microsoft, who continue to dominate on a global scale.

In a 2018 interview with CNBC, CEO and chairman of Alibaba and chairman, Daniel Zhang suggested that Alibaba’s future might be one in which cloud is its main business, even though at the time it only accounted for for 7 per cent of the company’s current total revenue.

At the moment, Alibaba operates 10 data centers in China and an additional 11 more internationally.

The deepened focus on cloud computing might be the result of COVID-19’s destructive impact on the retail businesses that make up a significant percentage of Alibaba‘s overall revenue, like Tmall and Taobao, forcing the company to look elsewhere for growth.

Cloud computing technology has been a hot topic amid the pandemic from company investments like these to the launch of the COVID-19 High Performance Computing Consortium by the US federal government in an effort to support researchers around the world battling the virus by leveraging US supercomputers. Members of the consortium include IBM and Amazon Web Services and more recently, GPU maker NVIDIA.

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