China’s Alibaba Cloud to open first public cloud region in Mexico

Chinese technology group Alibaba Cloud announced plans to launch its first public cloud region in Mexico in the next three years, along with additional datacenters in Asia.

The Mexican region will be the company’s first in Latin America.

In a statement, Alibaba Cloud said that the “investment to build new cloud and AI infrastructure across key international markets also aims to enhance the cloud and AI product suite for its worldwide customers, while enhancing global partnership and fostering AI talent development to nurture future digital expertise.”

In the announcement, made during the Alibaba Cloud Global Summit 2024 in Paris, the company did not provide details as to the timeline or the stage of works for the projects. 

In a report from July last year, Gartner said that Alibaba Cloud, driven mostly by business in mainland China and Asia-Pacific, ranked third in IaaS cloud market worldwide. 

It reported US$9.28bn in revenues for 2022, up from US$9.06bn in 2021, giving it a 7.7% market share of total revenue.

“While Alibaba continued to lead the IaaS market in China, its limited potential for expansion across global markets has slowed growth,” Gartner wrote.

Alibaba Cloud trailed AWS and Microsoft and was ahead of Google and Huawei in 2022, according to the consultancy and research firm. 

"With the rapidly rising demand for AI across industries, we are reinforcing our commitment to expanding our AI infrastructure and enhancing our cloud capacities worldwide," Selina Yuan, president of international business at Alibaba Cloud Intelligence, said during the Alibaba Cloud Global Summit.

Alibaba Cloud claims to operate 89 availability zones (datacenter clusters) in 30 regions worldwide, none of which are in Latin America.

As for its Content Delivery Network (CDN), it reports node server clusters in the Americas in both the US and Brazil. Worldwide, it reports over 3,200 nodes in more than 70 countries.

ALSO READ: Spotlight: Latin America's public cloud regions 

GENERATIVE AI

The company also announced that its main generative AI development platform, Model Studio, will soon be available for international customers via its availability zones in Singapore.

Through Model Studio, customers have access to Alibaba Cloud’s large language model Qwen family, including both closed-source and open-source models.

The platform, says the Chinese company, features multimodal capabilities with sizes that range from 0.5 billion to several hundred billion parameters, to facilitate the development of custom generative AI applications. 

“Additional model finetuning and inferencing tools and services will be available in the second half of the year, fostering the development of more sophisticated AI tasks with greater cost-efficiency,” said the company.

Alibaba is also partnering with Germany’s SAP to integrate the SMEs-focused SAP Business One software with Alibaba Cloud's infrastructure in Asia.

According to the company the combination is poised to provide SMEs in that region with a scalable enterprise resource planning (ERP) system on the cloud without the need for substantial initial investment in IT infrastructure.

The group also said that, “given the increasing interest and demand from multinational companies operating in China,” it is developing a training course for multinational companies in China for the use of US firm Salesforce’s CRM platform on Alibaba Cloud.

“Since its exclusive availability on Alibaba Cloud in China from the end of 2023, Salesforce has helped multinational brands meet the unique needs of the Chinese market while providing consistency for its global Salesforce products including Salesforce Sales Cloud, Service Cloud, and Salesforce Platform.”

Alibaba Cloud is also initiating collaborations with international universities, such as University of Reading, Singapore University of Social Sciences, King Mongkut’s University of Technology Thonburi, Arovy University, University Saint Thomas Mozambique to introduce cloud computing and AI courses.

PERFORMANCE

Launched in 2009 as the digital technology and intelligence backbone of the Alibaba group, Alibaba Cloud offers computing, database, storage, network virtualization services, security, big data analytics, machine learning and artificial intelligence (AI) services. 

For fiscal year 2024, ended March 31, the Alibaba group’s total revenues grew 8% year-on-year to over 941bn yuan (US$130bn), with total net income reaching 71.3bn yuan, up 9%.

In fiscal Q4, revenues were 221bn yuan, which was a 7% year-on-year increase.

Alibaba Cloud, specifically, continues to be a key growth driver, with quarterly revenue growing 3% to 25.6bn yuan. The public cloud business reportedly saw double-digit growth and AI-related revenue was up by triple digits. 

Alibaba Cloud’s Qwen large language model (LLM) has been adopted by over 90,000 enterprises, mostly from Asia or multinationals operating in China, as it faces stiff competition from AWS, Microsoft and, locally, Tencent Cloud.