Alibaba offers $1 billion to cloud customers in hopes of growth

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Alibaba Group Holding Ltd. said it will pledge up to $1 billion in loans to help Chinese customers build and expand their businesses using its cloud services, hoping the move will reignite growth in the company’s cloud-computing business. The money pledged by Alibaba Cloud follows the company’s initial public offering in New York on Sept 18, where it raised $25 billion from investors at a value of about $200 billion. By offering credit lines and guaranteeing loans, Alibaba Cloud can offer cheaper financing options than existing banks and capital providers, CEO Simon Hu told Bloomberg News in an interview yesterday at Alibaba’s headquarters in Hangzhou, China.

Alibaba, the Chinese e-commerce behemoth, said it will spend $1 billion over the next three fiscal years to assist its cloud computing clients as it attempts to resurrect growth following a long-term decline.

According to a news release issued by Alibaba on Thursday, the investment comprises of “financial and non-financial incentives, such as cash, rebates, and go-to-market strategies.”

The business announced that it is also putting up a programme to assist its clients in tailoring their cloud computing needs to the regional market.

According to Gartner, Alibaba is the third-largest cloud computing player in the world, after Microsoft and Amazon. Although cloud computing is now a modest portion of Alibaba’s overall business, the management of the firm views it as a vital aspect of future development and profitability.

However, because to the return of Covid in the second-largest economy in the world and a harsher local regulatory environment, Alibaba has seen an extraordinary halt in growth during the Chinese economic downturn. Alibaba announced its first flat revenue increase in recorded history for the April to June quarter.

Its cloud computing division’s revenue growth also decreased from the prior quarter.

The corporation with headquarters in Hangzhou, China, Alibaba has announced an investment as part of a larger effort to take its cloud computing operations global.

In order to attract clients in overseas markets like Singapore and Thailand, Alibaba has established new data centres in recent years.

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