TECH - Anticipated AI Boom Fails To Drive Up Cloud Services Spending In China | Benzinga
In a surprising turn, the much-anticipated boom in artificial intelligence (AI) has failed to bring about a significant increase in cloud services spending in China.
What Happened: Canalys, a tech market research firm, pointed out that the Chinese cloud market relies heavily on government and state-owned businesses for its growth, CNBC reported on Tuesday. The market had high hopes for AI models like ChatGPT-like services on the cloud to boost its growth, but the reality hasn’t matched the expectations.
Notably, Alibaba (NYSE:BABA), which owns the most significant market share in China’s cloud business at 39%, reported a modest 2% YoY revenue growth for the quarter ending Sept. 30. Furthermore, the company scrapped plans to publicly list its cloud operations in November.
Huawei, the runner-up in the cloud market, and Tencent (OTC:TCEHY) did not disclose their cloud revenues for the third quarter. The three companies maintained their market shares in the third quarter, just as in the previous one.
The sector’s overall growth slowed down to 10% in 2022, a sharp ...