Alibaba invests $ 28 billion in cloud services

Alibaba Group Holding said it will invest 200 billion yuan ($ 28 billion) in its cloud infrastructure over three years. This plan was a response to the rapid growth of demand in the commercial segment due to the outbreak of coronavirus in China.

According to the company, funds will be allocated for semiconductor solutions, development of an operating system and building its own data center infrastructure.

Since most of the Chinese employees were working at home during February, China’s leading cloud service provider was faced with an increase in the use of its software, especially DingTalk, a workplace chat application used by both enterprises and educational institutions.

Alibaba Cloud Intelligence President Jeff Zhang said the COVID-19 pandemic “created additional stress in all sectors of the economy,” but the company hopes its investment will help enterprises “accelerate the recovery process.”

The cloud division is one of Alibaba’s fastest growing businesses. Revenues in the fourth quarter grew 62% to 10.7 billion yuan, for the first time in one quarter, exceeding 10 billion yuan.

According to Canalys research company, in the fourth quarter, the technology giant occupied 46.4% of China’s cloud market. The second and third places are occupied by Tencent Cloud and Baidu Cloud, which occupy 18% and 8.8% of the market, respectively.

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