By Yang Jianyong

Alibaba Group CEO Wu Yongming revealed on the 24th that Alibaba will invest over RMB 380 billion in the next three years to bolster cloud and AI hardware infrastructure. This colossal sum surpasses the company's total investment in the past decade, marking an unprecedented milestone for private enterprise investment in China's cloud and AI hardware infrastructure sector.

Large models are undeniably the hottest technology trend, igniting a fresh wave of AI innovation and propelling it into the generative AI era. Across all sectors, large models are harnessing their transformative power, leading to rapid integration of large model services in various industries.

Particularly noteworthy is the emergence of DeepSeek this year. Its low cost, open-source nature, and exceptional performance have led to widespread adoption across industries. This enables more enterprises to deploy AI applications cost-effectively, while simultaneously boosting revenue for cloud computing companies such as Huawei Cloud, Tencent Cloud, Alibaba Cloud, Baidu Intelligent Cloud, and others that are adapting to this trend.

It is crucial to observe that the current growth engine of the cloud service market is primarily fueled by generative AI. According to Synergy Research data, global enterprises are projected to spend USD 330 billion on cloud infrastructure services in 2024, an increase of USD 60 billion from 2023, representing a 22% year-on-year growth and a USD 102 billion jump from 2022. Notably, generative AI accounts for half of this market growth.

In the realm of global cloud infrastructure, vendors like Amazon, Microsoft, and Alibaba continue to shine brightly. As one of the industry's pioneers in deploying large model technology, Alibaba Cloud has witnessed its revenue rebound to double-digit growth, largely driven by the momentum of AI large models.

For the fiscal year 2025 third quarter ending December 31, 2024, Alibaba Cloud reported a quarterly revenue of RMB 31.742 billion, marking a 13% year-on-year increase. Public cloud revenue sustained double-digit growth, while AI-related revenue has experienced triple-digit growth for six consecutive quarters. Adjusted EBITA surged by 33% to RMB 3.138 billion.

The robust growth of Alibaba Cloud is underpinned by the double-digit expansion of public cloud business revenue, including increased adoption of AI-related products. Remarkably, AI-related product revenue has achieved triple-digit year-on-year growth for six straight quarters, positioning Alibaba Cloud as the preferred provider for recognized public cloud products and the largest model service platform in China, boasting the richest model variety. As of January 31, 2025, the number of derivative models developed on Hugging Face based on the Qwen model family surpassed 90,000, making it one of the world's largest AI model families.

Furthermore, according to multiple international authoritative rankings from Gartner, IDC, Forrester, and Omdia, Alibaba Cloud's AI capabilities and large model products lead globally and rank firmly at the top in China. Alibaba Cloud is also the first major domestic company to open-source its self-developed large models, dedicated to advancing multimodal AI technology. Its continuously open-sourced Tongyi model has become the most popular domestic large model among enterprises and developers.

AI large models serve as a pivotal driver for cloud revenue growth across various vendors. Fueled by AI, Alibaba Cloud's revenue growth is poised to accelerate further. Simultaneously, Alibaba has significantly increased its R&D investment in AI foundational models to ensure technological advancement and industry leadership, fostering the development of AI-native applications. Wu Yongming emphasized, "The explosion of AI far exceeds expectations, and the domestic technology industry is on the rise with immense potential. Alibaba will spare no effort in accelerating the construction of cloud and AI hardware infrastructure to bolster the development of the entire industry ecosystem."

The generative AI wave is sweeping the globe, and the global AI infrastructure market is on an unprecedented growth trajectory. IDC predicts that by 2028, spending will exceed USD 200 billion.

Large models represent a technology and capital-intensive industry, necessitating substantial investment to build robust AI infrastructure. Alibaba Cloud is centering its efforts on AI to comprehensively reconstruct underlying hardware, computing, storage, networks, databases, and big data, ensuring seamless adaptation and integration with AI scenarios. This approach accelerates model development and application, creating the most robust AI infrastructure for the AI era.

As large model technology continues to breakthrough, it is accelerating the empowerment of industrial upgrading, ushering in unprecedented opportunities. In summary, large models are heralding a new era of growth, enabling cloud vendors to ride this wave and unleash their full growth potential.

Yang Jianyong, a Forbes China contributor, expresses his personal views and is dedicated to providing in-depth insights into cutting-edge technologies, including the Internet of Things, cloud services, artificial intelligence, and smart homes.