KUWAIT CITY, April 9: Alibaba Group Holding Ltd. has implemented significant price cuts for its cloud computing services, reducing prices for customers by as much as 59%. This move comes amidst intense competition in the cloud computing market and as Alibaba’s cloud division faces challenges in maintaining its growth. The price cuts reflect Alibaba’s efforts to remain competitive and stimulate growth in its cloud business. CEO Eddie Wu is leading a comprehensive reform process to revitalize Alibaba’s core businesses, including e-commerce and cloud computing. Alibaba’s decision to scrap plans for a public listing of its cloud business in November was influenced by difficulties in obtaining the advanced Nvidia Corp chips needed to compete effectively.

Additionally, increasing competition from rivals like Tencent Holdings Inc and state-backed service providers has posed challenges for Alibaba’s cloud division. The company has reduced prices for approximately 500 cloud products by an average of 23% across 13 regions, including Japan, Indonesia, the UAE, and Germany. These price cuts aim to attract new customers and retain existing ones amidst intensifying competition. Despite being the largest provider of cloud services in China, Alibaba faces stiff competition from global giants like Amazon and Microsoft. Market share losses in China and limited expansion abroad have contributed to challenges for Alibaba’s cloud business.

Alibaba’s cloud division, which generated over $11 billion in revenue in the last fiscal year, is expected to see a decline in revenue of 2% in the March quarter. Restrictions on US chips have been cited as a major challenge for Chinese cloud service providers, impacting their ability to access advanced AI hardware. The price cuts announced by Alibaba follow previous domestic price reductions in February, signaling a broader strategy to stimulate growth and remain competitive in the cloud computing market. These price reductions are expected to benefit both new and existing international customers, making Alibaba’s cloud services more affordable and accessible.