Mainland China's spending on cloud infrastructure services has grown by 18% in Q3 2023, bringing the total to USD $9.2 billion, according to Canalys. This figure represents 12% of global cloud spending. The rise shows the Chinese cloud market stabilising despite its reliance on government and state-owned enterprises to drive growth.
Alibaba Cloud, Huawei Cloud, and Tencent Cloud, mainland China's top three cloud vendors in Q3 2023, accounted for a 73% share of customer expenditure after a collective 22% growth. The three vendors continually unveil new artificial intelligence (AI) solutions, keeping the industry's focus squarely on AI innovation. This drive for AI technology reflects the widely recognised understanding that AI progress relies heavily upon the support of partnerships, which vendors are increasingly working to foster.
As Alibaba Cloud and Huawei Cloud launched their AI model development platforms, integrating third-party open-source AI models onto their platforms became available to developers. This development enables the training and accessibility of various models via these platforms.
Yi Zhang, an analyst at Canalys, said, "Achieving widespread deployment of AI technology is nearly impossible for vendors without the help of a variety of partners." Echoing these sentiments, he emphasised the importance of a healthy AI ecosystem in delivering customer value at scale.
As AI becomes increasingly complex, so have the partnerships, with strategic alliances forming between vendors and service providers and among different cloud vendors themselves. Such collaborations combine technical offerings and expertise, thus driving market values and growth.
Alibaba Cloud was the Q3 2023 market leader, boasting a 39% market share. Despite abandoning its plan to spin off its cloud business unit, Alibaba Cloud continues its commitment towards AI products. It recently launched the "Bailian" platform, a one-stop AI foundation model development platform allowing streamlined user access to AI foundational models. In addition, Alibaba Cloud announced the availability of its first data centre in Wuhan, Central China.
Huawei Cloud retains its position as Q3 2023's second-largest cloud service provider. It holds a 19% market share after enjoying a 16% year-on-year growth. Huawei unveiled the AI Gallery platform as an open-source AI foundation models portal for global enterprises and developers. With significant expansion plans, Huawei Cloud aims to help the growth of 1,000 European startups in the next five years after recording a 400% year-on-year increase in Huawei Cloud partners in Europe in 2023.
Tencent Cloud continues its steady growth, enjoying a 14% increase in the recent quarter, accounting for a 15% market share. As part of its move to expand the range of available cloud services, Tencent Cloud has extended the sales rights of over 110 products to channel partners. This update is part of a broader investment in its channel ecosystem, intending to foster collaborative engagements with partners.
In Canalys's definition, cloud infrastructure services encompass services offering infrastructure-as-a-service and platform-as-a-service, either via dedicated hosting on private infrastructure or shared public infrastructure, excluding direct software-as-a-service expenditure but including the relevant infrastructure services costs.