Alibaba is Investing RMB 200 Billion in Cloud Services After Covid-19 Boom

Alibaba Cloud, a subsidiary of Chinese e-commerce giant Alibaba, will spend RMB 200 billion ($28.27 billion) on its cloud infrastructure over the next three years following an increase in demand for digital services in the aftermath of the Covid-19 outbreak in China.

Why it matters: Alibaba’s cloud revenue grew 62% in the quarter ended December 2019 compared with the same quarter a year earlier, the company said in February.

  • The Covid-19 pandemic has resulted in extra demand for digital services, which are typically reliant on cloud computing services and data centers to function.
  • Alibaba Cloud is the largest provider of cloud computing services in China, but falls behind Amazon and Microsoft globally.

Details: Alibaba’s investment will focus on operating system and chip development, as well as on its network of data centers, where the technologies will be deployed.