Alibaba to close data centres in Australia, India amid expansion in Southeast Asia, Mexico

The latest initiative by Alibaba Cloud, mainland China’s leading cloud infrastructure services provider, reflects the company’s efforts to attract more customers in major markets amid headwinds from geopolitical tensions and a lack of advanced chips used in data centres for artificial intelligence (AI) projects.

Alibaba Cloud still trails major US rivals – including Amazon Web Services, Microsoft Azure and Google Cloud – which accounted for 31 per cent, 26 per cent and 10 per cent, respectively, of the global cloud infrastructure services market in the fourth quarter last year, according to data from tech research firm Canalys.

Still, Alibaba Cloud’s latest initiative could open potential new deals for the company. Global private equity investors and asset managers are preparing for billions’ of dollars worth of mergers and acquisitions and investments linked to data centres in the Asia-Pacific, as the AI boom fuels demand for digital infrastructure.

Founded in 2009, Alibaba Cloud serves about 80 per cent of mainland China’s technology companies and half of AI large language model (LLM) companies use its digital infrastructure, according to Alibaba co-founder and chairman Joe Tsai in a speech last October. LLMs are the technology underpinning generative AI services like ChatGPT.

Last month, Alibaba Cloud unveiled plans to expand into certain key markets over the next three years. The company is set to to build its cloud facilities in Mexico, while setting up new data centres in Malaysia, the Philippines, Thailand and South Korea by 2027.