China’s cloud market is a three-horse race with a clear front-runner. In the first quarter of 2025, Alibaba Cloud held about 33% of a market worth $11.6 billion in the quarter, with Huawei Cloud at 18% and Tencent Cloud at 10%, the three together commanding roughly 61%.[1] It is a concentrated market, and for a couple of years a sluggish one. Then came AI.
The turnaround at the leader is striking. Alibaba Cloud’s revenue grew 26% year on year in the June 2025 quarter, an acceleration from 18% the quarter before, and its AI-related products have posted triple-digit growth for eight consecutive quarters: now more than a fifth of its external revenue.[2] After years of single-digit growth, the cloud has become Alibaba’s engine again.
For two years China’s cloud drifted. Then generative AI arrived, and the biggest player started growing at 26% again.
Show as a table
| Series | Value |
|---|---|
| Alibaba Cloud | 33% |
| Huawei Cloud | 18% |
| Tencent Cloud | 10% |
| All others derived: 100 − 61 | 39% |
Source: reference [1] below.
Betting the balance sheet on AI
The conviction is backed with capital. In February 2025 Alibaba committed to spend $53 billion, some 380 billion yuan, on cloud and AI infrastructure over three years, one of the largest such commitments by any company anywhere, and it has been deploying it fast.[2][4] The bet is explicit: that AI demand will pull a wave of on-premises corporate computing onto the cloud, and that whoever builds the capacity first captures it.
One honest caveat on the numbers. Cloud market-share figures vary by analyst and by quarter, an earlier reading put the top three at 72% combined, so the shares should be cited with their date and source rather than read as a clean trend.[3]
What we do with this
China’s cloud market is where the country’s AI ambitions become a business, and the AI-driven reacceleration is the single most important development in it. The structure, three dominant players, one clear leader, is stable, but the growth vector has shifted decisively from generic compute to AI services, which is where margin and differentiation now live. We read Alibaba’s $53 billion commitment as the clearest signal of where the sector is heading: a capital-intensive race to build the AI infrastructure of the Chinese enterprise, in which the returns will accrue to whoever couples the most capacity with the most-used models. The cloud stopped being a utility and became, again, a growth story.
| Ref | Publication | Date | Supports |
|---|---|---|---|
| [1] | DatacenterDynamics (citing Canalys) | May 2025 | Q1 2025 market size and the three shares |
| [2] | DatacenterDynamics | Sep 2025 | Alibaba Cloud growth rate, AI product growth, the $53bn commitment |
| [3] | TechNode (citing Canalys) | Jul 2024 | The earlier 72% combined-share reading |
| [4] | The Register | Sep 2025 | Deployment of the infrastructure commitment |
References
- DatacenterDynamics (citing Canalys), “Cloud computing spend in China reached $11.6bn in Q1 2025,” May 2025. Read source ↗
- DatacenterDynamics, “Alibaba’s cloud unit sees 26% revenue growth YoY,” Sep 2025. Read source ↗
- TechNode (citing Canalys), “Alibaba leads cloud service market in China in Q1,” Jul 2024. Read source ↗
- The Register, “Alibaba Cloud plans expansion into Europe, South America,” Sep 2025. Read source ↗
Every source above is public and linked. This is a research brief from Singularity Dynamics; full briefings on this topic are available on request.