Mainland China’s cloud infrastructure market experienced accelerated 16 percent growth with spending reaching US$11.6 billion in Q1, according to Canalys.
A key driver was a wave of artificial intelligence (AI) adoption among Chinese enterprises.
Alibaba Cloud maintained its pole position, snaring a third of the market and posting a 15 percent revenue increase compared to the same period last year.
Huawei Cloud was next with 18 percent market share and an 18 percent increase in revenue.
Coming in third was Tencent Cloud with 10 percent share. Its growth was tempered by ongoing supply constraints for graphics processing units (GPUs), which led the company to prioritise these critical AI chips for its own internal needs rather than external customers.
“AI is accelerating cloud adoption across the board. On one hand, organisations that previously relied on on-premises data centres are now migrating to the cloud to support AI workloads. On the other hand, enterprises with existing cloud infrastructure are increasingly integrating AI into their internal data and business processes, fueling sustained demand for GPU, IaaS services and foundation model capabilities,” said Rachel Brindley, Senior Director of Canalys.
The rapid expansion of AI-related workloads is reshaping the competitive landscape. Despite facing US export restrictions that limit access to advanced chips, Chinese cloud vendors are actively exploring new pathways to drive AI adoption and unlock fresh capabilities.
“Leading cloud providers are actively exploring pathways for AI adoption, unlocking capabilities and building ecosystems through model open-sourcing, while accelerating task execution and scenario delivery via AI agent platforms,” said Yi Zhang, Senior Analyst of Canalysa).
Entelechy Asia 