E-commerce giant Alibaba Group Holding Ltd has announced it will invest 200 billion yuan ($28 billion) in cloud infrastructure over three years. This follows a surge in demand for business software as the coronavirus pandemic peaked in China.
The company disclosed in a statement that it will dedicate the funds on semiconductor and operating system development as well as building out its data centre infrastructure.
According to reports, most of China’s white-collar employees worked from home in February, the country’s major cloud player saw a growth in the usage of its software, most notably DingTalk, a workplace chat app used by both businesses and schools.
At one point, users complained of lags on the app due to the high volume of activity. The company acknowledged the issues on Weibo, the Chinese social networking site.
Alibaba Cloud Intelligence president Jeff Zhang said in the statement that the COVID-19 pandemic “has posed additional stress on the overall economy across sectors” and the company hoped the investment would help businesses “speed up the recovery process”.
Alibaba’s cloud division is one of its fastest-growing businesses. Fourth-quarter revenue climbed 62% to 10.7 billion yuan, the first time it has topped 10 billion yuan in a single quarter.
The tech giant commanded 46.4% of China’s cloud market in the fourth quarter, according to research firm Canalys. Tencent Cloud and Baidu Cloud, which have also seen demand for their products surge, had 18% and 8.8% of the market respectively.
