Alibaba, Baidu Drive China’s AI Cloud Surge as Market Hits US$2.7 billion
- tech360.tv
- Aug 19, 2025
- 2 min read
Alibaba Group Holding and Baidu led China’s booming public cloud market for artificial intelligence in 2024, as the sector surged 55% to reach US$2.7 billion, according to consultancy IDC.
Each company held roughly 25% of the market, followed by Tencent Holdings and Huawei Technologies.
The rapid growth was fuelled by rising demand for AI training and applications, particularly in generative and agentic AI, IDC said.
Before 2022, AI cloud services were mainly used for traditional applications such as optical character recognition, quality inspection and surveillance.
By 2023, large language models began dominating the market, and in the second half of 2025, AI services evolved into agentic forms, enabling autonomous, task-oriented interactions.
This shift has driven demand for cloud platforms that support both generative AI applications and training resources for clients to develop their own AI tools.
Among five AI cloud service segments, computer vision was the largest, growing 34% to 8.1 billion yuan in 2024, led by Tencent and Baidu.
Machine learning was the fastest-growing segment, rising 164% to SGD 990 million, with Huawei and Alibaba leading the category.
IDC recommended that cloud providers reconstruct their architectures to fully support AI integration in daily life and prioritise ethical compliance to ensure transparency, accountability and bias mitigation.
China’s broader cloud-computing market also expanded, with first-quarter spending from a year earlier rising 16% year on year to USD 11.6 billion, according to Canalys.
Alibaba led the overall cloud market in the March quarter with a 33% share, followed by Huawei at 18%.
Major Chinese cloud firms are continuing to enhance their AI capabilities.
In June, Liu Weiguang, senior vice-president at Alibaba Cloud, said the company would expand its AI services to overseas data centres as part of a planned 380 billion yuan investment over the next three years.
Earlier in July, Baidu introduced AI-powered “digital employees” capable of performing roles such as marketing managers, loan assistants and auto sales personnel.
China’s AI public cloud market grew 55% to US$2.7 billion.
Baidu launched AI-powered digital employees for corporate use
Computer vision and machine learning were the top AI cloud segments
Source: SCMP
