Cloud firms expand overseas footprint

Chinese cloud computing companies have accelerated steps to expand their presence in overseas markets and build digital infrastructure such as data centers, as an increasing number of businesses are leveraging artificial intelligence technology and cloud services to drive digital transformation and upgrades.

Alibaba Cloud, the cloud computing arm of Chinese tech giant Alibaba Group, said it will speed up the construction of a global cloud computing network covering China, Japan, South Korea, Southeast Asia, the Middle East, Europe and the Americas.

The company recently announced a significant expansion in Southeast Asia, including the opening of its third data center in Malaysia on July 1 and plans for a second data center in the Philippines slated for October, to address growing demand for AI and cloud services. With these expansions, Alibaba Cloud will increase its global network to 90 availability zones across 29 regions.

The move came after the company launched its first cloud region in Mexico in February, marking a significant milestone in its efforts to drive digital transformation and innovation across Latin America. It also unveiled its second data center in Thailand, to meet the country's surging demand for cloud computing services and support generative AI applications.

Alibaba Group has announced that it will invest more than 380 billion yuan ($52.9 billion) in building cloud and AI hardware infrastructure over the next three years.

"Our planned investment in cloud and AI infrastructure over the next three years is set to exceed what we have spent over the past decade," said Wu Yongming, CEO of Alibaba Group, and chairman and CEO of Alibaba Cloud Intelligence Group.

Tencent Cloud, Tencent Holdings Ltd's cloud computing business, is expanding its footprint in Japan with a new data center in Osaka, marking its third in the country. The company also said it would build its first Middle East data center in Saudi Arabia, with a total investment of more than $150 million in infrastructure construction over the next few years.

"Chinese mainland cloud vendors are accelerating their global expansion by focusing on AI infrastructure and localized data centers. They prioritize emerging markets like Hong Kong, Southeast Asia, the Middle East and Africa," said Charlie Dai, vice-president and principal analyst at research company Forrester.

They are leveraging ecosystem partnerships, shifting from product exports to integrated platforms and software supply chain for targeted industries to support overseas clients, Dai said, highlighting that the move will be conducive to accelerating global AI deployment by providing scalable infrastructure and localized services, and reducing barriers for multinational firms.

It also fosters cross-border data collaboration, supports region-specific model fine-tuning, while diversifying global AI ecosystems to address volatility due to geopolitical frictions, he said.

Chinese vendors, Dai added, are still facing some challenges, including compliance complexity, talent shortage and cultural differences in overseas markets.

Pan Helin, a member of the Expert Committee for Information and Communication Economy, which is part of the Ministry of Industry and Information Technology, said Chinese enterprises that are making forays into overseas cloud service markets should not only improve the construction of cloud infrastructure abroad, but also enhance innovative capacities in key software applications, so as to better serve global clients.

According to international market consultancy Canalys, global spending on cloud infrastructure services stood at $90.9 billion in the first quarter of 2025, marking a 21 percent year-over-year increase.