China AI IaaS spend jumps 165%
China’s generative AI training spend will quadruple to RMB 40.87B by 2029, reshaping its cloud future.
Generative AI IaaS spending in China surged 165% year-over-year in H2 2024, reaching RMB 8.74 billion.
Forecasts show China’s training infrastructure spend will rise from RMB 10.68B in 2024 to RMB 40.87B by 2029.
Alibaba Cloud leads with 23% market share, followed by Huawei Cloud (10%) and ByteDance’s Volcano Engine (9%).
In China, the race to build the foundations of artificial intelligence is accelerating—and fast.
According to IDC’s latest report, spending on generative AI infrastructure services surged 165% year-over-year in the second half of 2024, reaching RMB 8.74 billion (about $1.2 billion).
For the first time, generative AI workloads now make up over 70% of China’s total AI IaaS (Infrastructure-as-a-Service) market. That shift marks a new phase in the country’s AI development strategy—one centered not just on research, but on scaled deployment.
At the center of this transformation is Alibaba Cloud, which pulled in RMB 4.86 billion in revenue from AI infrastructure services during this period, commanding 23% of the market.
Huawei Cloud and ByteDance’s Volcano Engine followed in second and third place, with 10% and 9% shares, respectively. Together, these three are establishing themselves as the go-to platforms for enterprises building and training large AI models in China.
Chinese cloud providers are undergoing a strategic transformation, shifting from a traditional "CPU + OS + software" model to a "GPU + cloud + AI" paradigm. This evolution is not merely a technological upgrade but signifies a fundamental change in how cloud services operate.
A Decade-Defining Investment Curve
The momentum is more than a blip.
IDC projects that China’s spending on generative AI IaaS training will grow nearly fourfold over the next five years: from RMB 10.68 billion in 2024 to RMB 40.87 billion by 2029.