Alibaba Cloud slashes prices by as much as 55% to fuel AI growth in China

Alibaba's cloud business on Thursday said it is cutting prices on a wide range of core cloud products by as much as 55%, in a bid to fuel AI growth in China.

The move aims to make "cloud capabilities more inclusive and accessible in the era of AI," Alibaba Cloud said. The price cuts take effect Thursday and will apply to more than 100 product specifications.

"As the biggest cloud service provider in China and APAC, we see tremendous growth prospect of China's digital market," said Liu Weiguang, president of public cloud business at Alibaba Cloud Intelligence.

"That's why we decide to launch the price reduction campaign to lower the threshold of cloud services for more enterprises and developers to reap the technological dividends and accelerate the adoption of advanced public cloud services across various industries in China," said Liu.

Interest and investments in generative AI have boomed since OpenAI launched ChatGPT in November 2022.

In a report published November 2023, McKinsey explained that the much-hyped tech offers opportunities for established companies.

"One is using cloud to support generative AI initiatives. With its massive calls on compute, storage, and networking, generative AI needs cloud to scale. Generative AI's complexity, moreover, requires implementation via scalable enterprise cloud platforms rather than via disconnected pilots and initiatives run by individual development teams," said McKinsey analysts.

Canalys estimated global cloud service spending will increase 20% in 2024, compared with 18% in 2023, fueled by the widespread adoption of AI applications.

"Hyperscalers are steadily ramping up investments in generative AI, expecting that harnessing its capabilities will catalyze new opportunities in cloud