Chinese cloud computing company Alibaba has cut the prices of its cloud software by up to 55%, striking the first blow in a cost war between Chinese cloud companies. 

Alibaba’s price cuts averaged around a 20% decrease on more than 100 of its services. 

Competitor also reduced its prices less than 24 hours after Alibaba.

In its statement posted on a WeChat account, a popular social media site in China, said that the entirety of its products would continue to be cheaper than its competitors. 

“This price comparison activity is targeted at specific cloud service providers,” it stated. 

In its 2024 thematic intelligence report into cloud computing, research and analysis company GlobalData reported that cloud computing will now be competing within the AI market.  

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Each cloud provider, forecasts GlobalData, will be in a race to provide the market’s best AI platforms and tools.

The global rise of GenAI has catalysed this competition and as every major cloud company releases its own AI products, cost will be a dominant factor used to compete for buyer attention. 

GlobalData’s report stated that cloud companies had long been investing in AI chips to support growing workloads, seeking out better performance than using standard GPUs. 

According to GlobalData forecasts, the total cloud computing market will be worth $1.4trn in 2027, achieving a compound annual growth rate of 17% between 2022 and 2027.