China’s Cloud Service Spending Reaches $9.4 Billion in Q2 2024, Led by AI Integration

Posted by By Dan Taylor 2 Min Read

China’s cloud infrastructure spending reached $9.4 billion in the second quarter of 2024, an 8% increase from the previous year, according to Canalys.

This growth highlights the country’s ongoing investment in cloud services, largely driven by advancements in artificial intelligence (AI).

Key Market Players

Alibaba Cloud, Huawei Cloud, and Tencent Cloud are the dominant forces in China’s cloud sector, holding a combined 71% market share.

Alibaba Cloud leads with a 36% share, propelled by double-digit growth in its public cloud business. The company has seen a surge in paying customers for its AI products, reporting a 200% quarterly increase. Revenue from AI-related services is growing rapidly, with triple-digit gains.

Huawei Cloud ranks second, with a 19% market share. It posted a steady 13% growth rate in Q2. Huawei’s launch of the Pangu 5.0 foundational model in June 2024, which offers diverse configurations for AI training, has further strengthened its position in AI-cloud integration.

Tencent Cloud comes in third, with a 16% market share. Tencent has introduced various AI models and launched a promotion offering 100 million free tokens to attract new enterprise users. The company has also provided free migration tools to support cloud transitions.

At its September Global Digital Ecosystem Summit, Tencent reported a 150% increase in the number of partners generating more than RMB 1 million ($142,000) in revenue.

AI Fueling Growth

AI is proving to be a significant driver of growth in China’s cloud market. Major providers are integrating AI technologies into their cloud services, enabling businesses to accelerate their digital transformation.

Despite challenging macroeconomic conditions, AI advancements are helping companies unlock new growth opportunities, solidifying the expansion of China’s cloud sector.

Dan Taylor
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Dan Taylor is the founder and editor of International Search Insights (ISI), the publication behind ReadIsi, and a Partner and Head of Innovation (Search & AI) at SALT.agency. He has worked in search for more than a decade, in-house and agency-side, and is regarded as one of the West’s leading voices on search engines beyond Google, including Yandex, Baidu, Naver and Cốc Cốc. On ReadIsi, Dan covers the engines and AI answer platforms that English-language coverage tends to miss: Baidu and ERNIE, Yandex and Alice AI, Naver, Cốc Cốc, Shenma, Sogou, WeChat and Weibo search, plus DeepSeek and Alibaba’s Qwen. He also keeps dated records of documented changes, such as the Yandex, Baidu and Naver algorithm update histories and the DeepSeek, ERNIE and Qwen model update histories. His approach is to take learnings from global search engines and apply logic with a high evidence threshold. A claim needs a source, patterns seen in one market are treated as a hypothesis until they are checked in another, and where the evidence is thin he says so. For brands, that means advice built on what can be shown, with measurement that separates being cited from being chosen. Dan is credited with coining the term “edge SEO” and won the inaugural TechSEO Boost research competition in 2018 for his work on CDN and edge changes for SEO. In 2026 he was credited with coining “Infinite Tail” to describe how keyword research is changing with AI search. He is the author of AI Search Marketing For The Travel Sector, writes for Search Engine Journal, Search Engine Land and Travel Marketing Guy, and has advised technology, SaaS, travel and enterprise ecommerce brands, including Cloudflare, GitLab and Airbnb. He has given multiple talks and panels at the International Search Summit in Barcelona, and has also spoken at Optimization Moscow, brightonSEO, Google Search Central Live Deep Dive Asia in Bangkok, Athens SEO and the Asia SEO Virtual Summit 2026, where his talk looked at how Baidu, Naver, DeepSeek, Tencent, Cốc Cốc and Yandex built their own AI answers.
Founder & Editor