Alibaba has announced that it will invest around 200 Billion Chinese Yuan in the cloud computing setup over the next three years to boost its cloud offerings. The amount is equivalent to 28 Billion US dollars and almost half of Alibaba’s revenue for the last financial year.
Alibaba investing 200 Million Yuan in its Cloud Business
Alibaba would make use of the cash in order to create more data centers as per the report from Bloomberg. The company also plans to use the funds for the development of supportive technologies like Semiconductor Chips and Artificial Intelligence accelerator chips.
Attempt to Recover Coronavirus damages
The tech giant said that it hopes that the company will be able to speed up its recovery process for the business damage that happened over the past few months. Due to the coronavirus pandemic, the global economy has hit adversely. The crisis began in China in November 2019, and since then, the businesses have been hit massively.
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Retail Businesses Hit Massively
Retail businesses have been hit massively, and the retail units generate Alibaba’s most revenue. Overall, the flow of funds has been decreased largely after the pandemic. Earlier, the retail businesses showed growth of about 30 % for years, the deals of various brands sold by Alibaba have fallen between 40 to 80 percent as compared to the first quarter of 2019.
Alibaba’s cloud market share to expand with the investment
Alibaba’s cloud revenue is growing at a rapid pace, and the revenue was recorded at 10.7 billion yuan in the last quarter of 2019. The consumer data depicts that the Chinese tech giant holds 46 Percent of the entire Chinese Cloud market. With the massive investment of 28 Billion dollars, the stakes are surely going to get stronger.