Chinese giant Alibaba is reportedly offering its cloud customers massive price cuts.
Bloomberg News reported on Monday (April 8).
The report said the company cut prices by an average of 23 percent for about 500 cloud product specifications for customers in 13 countries, including Japan, Indonesia, the United Arab Emirates and Germany.
Bloomberg noted that Alibaba CEO Eddie Wu is leading an effort to improve and streamline the company’s core business, which includes an e-commerce unit. Last fall, Alibaba shelved plans to take its cloud business public.
“Given the uncertainty in the current environment, after evaluation, we have decided not to pursue a full spin-off of Cloud Intelligence Group,” Wu said at the time.
The announcement comes after the White House said it would suspend shipments to China of advanced AI designed by companies such as Nvidia, aimed at blocking Beijing’s access to advanced US technologies that could boost the Chinese military. Is.
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With that in mind, Alibaba Chairman Joe Tsai told analysts during an earnings call that the firm will instead focus on “developing a sustainable growth model based on network and Based on emerging AI-driven demand for high-end cloud computing services.”
Alibaba is the largest cloud service provider in China, although a relatively minor player compared to the likes of Microsoft and Amazon Web Services (AWS), Bloomberg reports. The company has lost market share to state-backed rivals in China in recent years and has struggled to gain any ground overseas amid China’s tech crackdown and US trade sanctions.
Revenue from the cloud division, which crossed $11 billion in its last full fiscal year, is forecast to fall 2 percent in the current quarter, the report said, while Sai said last week that chips on the U.S. restrictions have presented a “major problem”. Chinese cloud companies.
Last month, the Chinese government began taking steps to help its fledgling AI startups compete amid a chip shortage, offering “computing vouchers” for small firms to offset rising data center costs. They can be helped to pay.