Alibaba Group Holding Ltd is extending its cloud price cuts to customers internationally.
Bloomberg reports that the cloud provider is now slashing its prices by as much as 59 percent for customers "from the US to Singapore."
This shortly follows the company's March 2024 announcement that it would be cutting cloud costs for its Chinese customers by up to 55 percent with the hope of winning back users from rivals including Tencent, JD.com, and Baidu.
Those rivals responded with their own round of discounts.
The discounts span around 500 cloud product specifications, with an average of a 23 percent price cost. They are available in 13 regions, including Japan, Indonesia, the UAE, and Germany.
The discounts are available to both new and existing customers. Alibaba also plans to increase discounts and commission rates for resellers, and will make its AI platform PAI-Linjum available in Singapore.
“Our latest pricing strategy is designed not only to reward long-term subscribers with more substantial discounts, but also to ensure that businesses can have a stable foundation to develop their long-term strategies when planning and developing their own AI applications,” Selina Yuan, president of the cloud unit’s international business arm, said in a statement.
Bloomberg Intelligence said: "Alibaba’s price cuts for ex-China cloud services affirms a greater focus on revenue growth vs. profitability this fiscal year ending March 2025. Consensus estimates for a two-percentage-point rise in the business’ 2025 adjusted Ebita margin from a year earlier appear overly optimistic."
The recent cuts follow the decision by Alibaba to call off the spin-out of Aliyun, its cloud unit.
Plans for the restructuring were first shared in May 2023, and in September the company was considering a $3bn private funding raise for the plan.
However, by November 2023, the plan was dropped due to the US export bans on advanced chips limiting Chinese cloud companies' offering potential. The sudden U-turn led to a 10 percent drop in Alibaba's shares.
Alibaba chairman Joe Tsai told shareholder Norges Bank that the US chips are posing a "big issue" for Chinese cloud providers.
