Alibaba Cloud ramps up global foray on AI boom

Alibaba Cloud, the cloud computing arm of Chinese tech heavyweight Alibaba Group, is accelerating efforts to expand its footprint in overseas cloud service markets as an increasing number of businesses leverage artificial intelligence technologies to bolster digital innovation.

The company recently announced the launch of its second data center in Dubai, the United Arab Emirates, in response to the growing demand for cloud computing and AI services from local businesses.

The launch, as part of Alibaba's previously announced investment plan of 380 billion yuan ($53.4 billion) in AI and cloud infrastructure over the next three years, underscores the company's commitment to supporting enterprises in the region and beyond to thrive through implementing its cloud infrastructure and AI technologies.

The move marks a new milestone since Alibaba Cloud's foray into the region in 2016 with its first data center in Dubai. It is also the company's newest data center launched globally this year, following those in Thailand, South Korea, Malaysia, Mexico and several cities in China.

With the addition of this new data center, Alibaba Cloud's global infrastructure now spans 92 availability zones across 29 regions, the company said.

Since the company entered the Middle East market in 2016, the region's digitalization process has accelerated significantly and the demand for high-performance, low-latency cloud services and AI capabilities has surged in fields like finance, healthcare, gaming, and government services, said Wan Canghai, vice-president of Alibaba Cloud International and general manager of the Middle East, Turkiye and Middle Asia at Alibaba Cloud Intelligence.

The new data center not only enhances local data compliance and service response speed, but also provides a full suite of products, including cloud-native services, large models and big data analytics, helping enterprises seize opportunities in AI transformation, Wan said.

Wio Bank, the Middle East's leading digital financial platform, has inked a strategic partnership with Alibaba Cloud to accelerate innovation across cloud computing, AI, and fintech. The company will build AI-powered agents for banking by leveraging Alibaba Cloud's advanced Qwen large language model to provide intelligent customer services, risk assessment, and personalized financial advice.

Last month, Alibaba Cloud announced at its annual flagship technology gathering, Apsara Conference 2025, that it plans to launch its first data centers in Brazil, France and the Netherlands, with additional data centers to be added in Mexico, Japan, South Korea, Malaysia and Dubai in the coming year.

It will increase investment in research and development of AI applications and computing power, and deeply integrate AI across its businesses to capture new growth opportunities in the AI era.

Experts said as global cloud providers are scrambling to expand in emerging markets, Alibaba Cloud is evolving into a supplier of intelligent solutions through its cloud computing infrastructure and AI technology, while the launch of its second data center in Dubai serves as a strategic move to deepen its presence in the Middle East and support the development of the local digital economy.

Chinese companies expanding into overseas cloud service markets should not only strengthen the construction of their overseas cloud infrastructure, such as data centers, but also bolster innovation in core software applications to better serve global clients, said Pan Helin, a member of the Expert Committee for Information and Communication Economy, which is part of the Ministry of Industry and Information Technology.

According to global market consultancy Canalys, global cloud infrastructure services spending stood at $321.3 billion in 2024, rising 20 percent year-on-year. The key driver behind this growth was the expansion of AI models, which significantly accelerated cloud adoption.

As AI market competition intensifies, cloud computing companies plan to further expand investments in cloud and AI infrastructure this year to keep pace with rising demand. Canalys forecasts that global cloud infrastructure services spending will grow 19 percent year-on-year in 2025.

It noted that as AI becomes more efficient and widely adopted, demand is expected to grow exponentially. In response, cloud service providers are making significant investments to grow AI model training, deployment and cloud-based applications.