Alibaba Expands Cloud to Mexico, Eyes Data Centers in Asia

Alibaba has announced the expansion of its global cloud computing services as part of its international growth strategy. The Chinese tech giant is extending its cloud availability zone to Mexico and plans to establish new data centers in Malaysia, Thailand, and South Korea over the next three years.

According to Selina Yuan, President, Alibaba Cloud’s international division, the company has increased its investment in international data centers to bolster its global cloud presence. This expansion aims to compete in a market dominated by Amazon, Microsoft, and Google, collectively holding around 67% of the market share. In contrast, Alibaba currently holds just under 5% globally but maintains a leading position in the Chinese market with a 39% share.

The decision to expand comes after a challenging period for Alibaba Cloud, marked by the cancellation of a planned IPO and a management reshuffle. However, the cloud unit remains a crucial component of Alibaba's business strategy, with CEO Eddie Wu and other senior executives anticipating a return to double-digit growth in the second half of the current fiscal year.

To drive growth, Alibaba is focusing on AI products and customer acquisition. Recently, the company expanded its partnership with French luxury brand LVMH, leveraging Alibaba's AI tools in China. This partnership underscores Alibaba’s commitment to utilizing AI to advance its cloud business.

In 2023, Alibaba launched its large language model, Tongyi Qianwen, and introduced an advanced version this month, aiming to keep pace with rivals like Baidu, Tencent, Microsoft, OpenAI, and Google in the AI space. These AI initiatives are integrated with Alibaba's cloud services, offering comprehensive solutions to clients.

“We think AI is the future and the trend,” Yuan told CNBC. “Cloud computing supports AI and large language models. We have a clear strategy and our large language model. We believe we can do more for our business, customers, and partners.”