Three leading Cloud infrastructure providers — Alibaba Cloud, Baidu Cloud and Tencent Cloud, have announced their financial performance for the quarter ending March 31, 2025.
The below chart from Canalys shows the market share of Cloud infrastructure providers in China during the fourth-quarter of 2024.
Alibaba Cloud
Alibaba Cloud reported revenue of RMB30,127 million (US$4,152 million), marking an 18 percent year-over-year increase in Q1-2025, with public cloud and AI-related services as key drivers. AI product revenue maintained triple-digit growth for the seventh straight quarter, with strong adoption across sectors like retail, manufacturing, and media. Enterprise tools such as the Lingma AI coding assistant contributed to this momentum.
Alibaba Cloud continues to invest in AI innovation and infrastructure to fuel future growth and sustain its market leadership. The company was recognized by Gartner as the only Chinese provider emerging as a leader across all four generative AI submarkets. Its latest AI model suite, Qwen3, showcases advancements in hybrid reasoning and model efficiency, with flagship models like Qwen3-235B-A22B setting new benchmarks in code generation and reasoning. The full open-sourcing of the Qwen3 series reflects Alibaba’s commitment to fostering broader AI innovation and adoption across the developer ecosystem.
Tencent Cloud
Tencent Cloud delivered solid performance in the first quarter of 2025, supported by the company’s broader strength in gaming, advertising, and AI innovation. Tencent reported revenue of 180 billion yuan, up 13 percent. The FinTech and Business Services segment, which includes cloud services, generated 27.6 billion yuan, marking a 16 percent increase. AI-driven improvements fueled growth across business lines, including a 22 percent rise in marketing services revenue and over 20 percent growth in both domestic and international gaming.
Despite U.S. restrictions on Nvidia’s H20 chip, Tencent highlighted its substantial chip reserves and emphasized its focus on optimizing chip efficiency through software. The company is also investing heavily in AI development, pledging a low double-digit percentage of 2025 revenue toward related capital expenditure. Tencent’s proprietary large language model, Hunyuan, and its integration of third-party technologies like DeepSeek underscore its open and adaptive AI strategy.
Tencent announced plans to increase capital expenditure in 2025, with a strong focus on advancing its artificial intelligence capabilities and infrastructure. In 2024, the company significantly ramped up its capital spending to $10.7 billion, or 12 percent of revenue, largely driven by AI investments including 39 billion yuan in the fourth quarter alone. President Martin Lau indicated that spending would remain in the “low teens” percentage of revenue in 2025, signaling a plateau rather than further acceleration, Reuters news report said earlier.
Tencent is investing heavily in its Hunyuan model and expanding into multimodal and open-source AI technologies. It also became the first major Chinese firm to integrate AI technology from DeepSeek, deploying it across major platforms like WeChat and its AI assistant Yuanbao, which quickly became the most downloaded iPhone app in China by March. Daily active users on Yuanbao surged more than twentyfold in just two months. Tencent continues to innovate through its Hunyuan Turbo S upgrade and new AI tools for converting text and images into 3D visuals. These initiatives accompany strong business performance, with fourth-quarter revenue rising 11 percent to 172.4 billion yuan and net profit hitting 51.3 billion yuan, buoyed by a resurgence in gaming revenues amid easing regulations in China.
Baidu
Baidu reported stronger-than-expected first-quarter revenue, driven by significant growth in its AI cloud business, which helped offset declines in its core advertising operations. Total revenue rose 3 percent year-over-year to 32.45 billion yuan ($4.50 billion). While revenue from online marketing fell 6 percent to 17.31 billion yuan, non-online marketing revenue surged 40 percent to 9.4 billion yuan, propelled by the company’s expanding AI cloud services.
As part of a strategic shift to reduce reliance on advertising, Baidu has deepened its focus on artificial intelligence. After being one of the first Chinese companies to launch a chatbot following ChatGPT’s debut, Baidu has faced rising competition, notably from DeepSeek.
In response, Baidu eliminated fees for premium chatbot services and rolled out upgraded AI models including Ernie X1, Ernie 4.5, and their Turbo versions. CEO Robin Li highlighted Baidu’s AI infrastructure capabilities, emphasizing the company’s 30,000-strong P800 Kunlun chip cluster as a competitive edge in training advanced language models.
Baburajan Kizhakedath
