Chinese conglomerate Alibaba is reportedly offering significant price cuts to its cloud customers.
These price cuts, of up to 59% for customers from the United States to Singapore, come as demand for cloud computing to support artificial intelligence (AI) projects soars, Bloomberg News reported on Monday (4 (May 8th) reported.
According to the report, the company reduced the prices of nearly 500 cloud product specifications by an average of 23% for customers in 13 countries, including Japan, Indonesia, the United Arab Emirates, and Germany.
Bloomberg noted that Alibaba CEO Eddie Wu is leading efforts to overhaul and revamp the company's major businesses, including its e-commerce division. Alibaba put its plans to take its cloud business public last fall on hold.
“Given the uncertainties of the current environment and after an evaluation, we have decided not to pursue a complete spin-off of Cloud Intelligence Group,” Wu said at the time.
The announcement comes after the White House announced that it would be blocking shipments to China of advanced AI designed by companies such as Nvidia, with the aim of blocking the Chinese government's access to cutting-edge U.S. technology that could strengthen China's military. This was done after announcing that it would be suspended.
free? of course.
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With that in mind, Alibaba Chairman Joe Tsai told analysts on an earnings call that the company is instead looking to “build sustained growth based on new AI-driven demand for networked and highly scaled cloud computing services.” The company said it will focus on “developing a viable growth model.”
Bloomberg reports that Alibaba is China's largest cloud service provider, but is a relatively minor player compared to companies like Microsoft and Amazon Web Services (AWS). The company has lost market share to state-backed rivals in China in recent years and has struggled to gain ground overseas amid China's technology crackdown and U.S. trade restrictions.
The cloud sector's revenue, which exceeded $11 billion in the previous fiscal year, is expected to decline 2% in the current quarter, the report said, while Tsai said last week that U.S. chip curbs were a “big deal” for China. “It's posing a problem,” he said. Chinese cloud company.
Last month, the Chinese government began taking steps to help emerging AI startups compete amid the chip shortage, offering “computing vouchers” for small and medium-sized enterprises to help pay for rising data center costs.