Alibaba ponies up $1 billion to build its Aliyun cloud biz

July 29, 2015, 12:12 PM UTC
Photograph by Hong Wu — Getty Images

Alibaba(BABA), the Chinese e-commerce giant that is beefing up its Aliyun cloud business worldwide, says it is investing another $1 billion in that effort.

The money will help Aliyun expand its international presence, beef up alliances like the one it has with data center provider Equinix (EQIX) and finance the build-out of new cloud and big data solutions, the company said in a statement.

“Aliyun has become a world-class cloud computing service platform that is the market leader in China, bearing the fruits of our investment over the past six years. As the physical and digital are becoming increasingly integrated, Aliyun will serve as an essential engine in this new economy,” Alibaba Group chief executive officer Daniel Zhang said in a statement.

Aliyun said it now runs five data centers in China and in Hong Kong, along with it’s new Silicon Valley-based facility. The new funding will help fire up new data centers in the Middle East, Singapore, Japan and Europe, according to the company.


The news comes a week after Aliyun announced a raft of cloud-based services. Aliyun’s goal in the U.S. is to help multinational companies as well as small businesses to sell to Chinese consumers.

All of this shows that Alibaba, the e-commerce leader in China aims to compete with Amazon not only in retail, but in cloud computing where Amazon Web Services leads the pack. Amazon entered the Chinese market with its Beijing-based facilities last year, so this is shaping up into an interesting battle.

But to put the latest Alibaba investment into perspective, a billion dollars is not all that much money in the greater scheme of things where that amount of money might fund a single data center.

In its most-recent quarter, AWS logged profit of $391 million on $1.82 billion in cloud-related sales. Google(GOOG) Cloud Platform and Microsoft(MSFT) Azure are two other major contenders in the public cloud infrastructure space.

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