By Yang Jianyong

AI serves as the core driving force behind the robust growth of the global cloud services market. Globally, Amazon, Microsoft, and Google are the dominant players, holding over 60% of the market share. Google, leveraging its Gemini large model, TPU chips, and AI infrastructure, has seen a continuous rise in market share, emerging as the fastest-growing among the top three cloud service providers worldwide.

It is evident that the competitive landscape in the cloud services market has shifted from a focus on resource scale to full-stack AI cloud capabilities. According to IDC MarketScape evaluations, cloud providers with full-stack capabilities, such as Alibaba Cloud and Baidu Intelligent Cloud, are seeing a continuous increase in their market shares. In contrast, providers relying solely on resource leasing are experiencing slower growth due to a lack of technological and ecological support.

Alibaba Cloud demonstrates strong competitiveness in the cloud market, leveraging its technological edge formed by chip-cloud-model integration, ranking first in the domestic AI cloud market.

In the high-end chip sector, Alibaba revealed that it has shipped a cumulative total of 560,000 units of its Zhenwu series AI chips. In the AI model layer, its Qianwen large model leads in inference and programming. In the AI application layer, it has launched multiple enterprise-grade intelligent agents covering office programming scenarios, along with its flagship AI application, Wukong, for the enterprise market.

Driven by AI, Alibaba Cloud's revenue has shown strong growth. For the quarter ending March 31, 2026, Alibaba Cloud's revenue reached RMB 41.6 billion, a 38% year-over-year increase.

Notably, revenue from AI-related products has achieved triple-digit growth for the eleventh consecutive quarter. Against the backdrop of accelerating AI revenue growth, Alibaba Cloud is firmly committed to investing in AI infrastructure, with expenditures far exceeding the initially announced RMB 380 billion to meet the AI demands across various sectors.

Baidu, on the other hand, has established a strong competitive position in the domestic AI cloud market through its moat formed by Kunlun chips, models, platforms, and cloud infrastructure.

Baidu's full-stack AI capabilities, spanning from inference and training to chips, clusters, and data centers, have driven robust growth in its AI business, reaching RMB 13.6 billion in the first quarter of 2026, a 49% year-over-year increase, accounting for 52% of its total revenue, surpassing half of its general business revenue for the first time.

Baidu's AI business primarily includes intelligent cloud infrastructure, AI applications, and AI-native marketing services. Among them, Baidu Intelligent Cloud infrastructure saw a 79% year-over-year increase in quarterly revenue, reaching RMB 8.8 billion, with GPU cloud revenue surging by 184%.

These figures indicate that Baidu's growth logic has been refactor (restructured), with AI becoming the core driver of growth, opening up a new growth cycle for Baidu. It also signifies that Baidu has officially transformed from a search-centric business model to an artificial intelligence company.

It should be noted that Baidu is the earliest tech giant in China to layout (strategically position) itself in the AI sector. Since 2010, it has made substantial investments in artificial intelligence, forming an AI infrastructure from the underlying Kunlun chip AI computing power to the Wenxin large model, and further to applications, carving out a differentiated competitive path in the AI public cloud market.

In conclusion

Benefiting from the generative AI trend, which is reshaping industries and creating immense commercial value, the global cloud services market will continue to exhibit strong growth, aiding in the revenue increase of cloud infrastructure. Of course, the global cloud services competitive landscape has changed, especially with investments in large models enhancing competitiveness and providing opportunities to capture more market share.

IDC points out that leading cloud providers are taking the lead with their full-stack AI capabilities and rich application scenarios. In the AI application public cloud services market, Baidu Intelligent Cloud ranks first with a 30.7% market share.

It also states that the industrialization of AI is moving from model competition into the "application deep waters." Whoever can truly integrate AI capabilities into business processes and drive large-scale implementation will gain an early advantage in future cloud service competition.

Yang Jianyong, a contributor to Forbes China, expresses views that represent his own. He is dedicated to in-depth interpretations of cutting-edge technologies such as AI large models, artificial intelligence, IoT, cloud computing, and smart home appliances.