China’s cloud infrastructure services market hit US$13.4 billion, up 24 percent year on year in Q3, according to Omdia. This is the second straight quarter above 20 percent growth.
As enterprises move past AI trials into production workloads, demand for compute, storage and data‑intensive services is lifting the entire stack.
Alibaba Cloud, Huawei Cloud and Tencent Cloud together account for more than 60 percent of China’s cloud infrastructure revenue.
Alibaba Cloud expanded its share to 36 percent, with AI‑related revenues on a ninth straight quarter of triple‑digit growth. It added multimodal and video‑generation capabilities around its Qwen3 family and launched AgentRun, a serverless service aimed at production‑grade AI‑agent deployment, while also bringing its second Dubai data centre online.
Huawei Cloud held its second place with 14 percent year‑on‑year growth and around 16 percent share, underpinned by industrial AI partnerships such as the Tianji Predictive Model 1.0 co‑launched with China Southern Airlines. Huawei has also beefed up its AI agent platform with more cloud‑native MCP services and workflows and plans to open a third availability zone in its Ireland region in early 2026.
Tencent Cloud posted roughly nine percent market share, constrained by availability of cutting‑edge AI compute but still pushing aggressive iteration around its Hunyuan 2.0 family. In late 2025 it rolled out HY 2.0 Think and Instruct models to improve complex reasoning and agent workflows, upgraded its Agent Development Platform, and began commercial billing for RAG‑based models on that platform
The AI agent race
As AI deployments shift from proofs‑of‑concept toward operationalised agents, Alibaba, Huawei and Tencent are converging on engineering‑led, platform‑centric AI‑agent strategies, with systematic upgrades across MCPs, knowledge bases, plugins and workflows.
“Individual model performance alone is no longer sufficient. The central challenge in scaling AI initiatives lies in orchestrating models, data, tools, and workflows within complex systems in a way that enables reuse, operationalization, and commercialisation,” said Yi Zhang, Analyst of Omdia.
The Omdia report also flags a rising role for partners with around a quarter of China’s cloud revenue coming via partner channels. That share is expected to expand as vendors lean on consultancies, ISVs and SIs to translate AI into domain‑specific business value.
Entelechy Asia 