Alibaba, Baidu lead China’s fast-growing market for AI cloud services

Baidu and Alibaba Group Holding led the market for public cloud services supporting artificial intelligence in China last year, as the industry embraced “disruptive innovations” towards generative and agentic AI, according to consultancy IDC.

The mainland AI public cloud market reached 19.6 billion yuan (US$2.7 billion) in 2024, increasing 55 per cent on the back of surging demand for AI training and applications, IDC said on Monday.

The top two market players each accounted for roughly 25 per cent of the market, followed by Tencent Holdings and Huawei Technologies, according to a chart that did not provide exact share numbers. Alibaba owns the Post.

“Disruptive innovations” in AI drove the surge in the market, IDC said. Before 2022, demand for AI cloud services came from “traditional” applications, including optical character recognition, quality inspection and surveillance.

Starting in 2023, large language models – the technology underpinning ChatGPT-like chatbots – began to dominate the market. AI services were now evolving into agentic forms in the second half of this year, marking a new era of autonomous, task-oriented AI interactions, the report said.

These shifts have prompted growing demand for AI cloud services, which can provide both generative-AI applications and training resources for clients to build their own AI services.

Among five segments within AI cloud services, the biggest was computer vision, which rose 34 per cent to 8.1 billion yuan last year, led by Tencent and Baidu, IDC data showed.