In Depth: China’s Cloud Giants Seek Profits Abroad as Domestic Margins Dwindle

The likes of Alibaba, Tencent and Huawei have accelerated their global expansion this year, thanks largely to the buzz around AI, encroaching on the territory of U.S. leaders Microsoft and Amazon

Cloud computing has become a new battleground in the China-U.S. fight for tech dominance.

China’s biggest cloud service providers, including units from Alibaba, Tencent and Huawei, are betting big on overseas expansion as profits dwindle in their saturated home market.

But as Chinese competitors push overseas, they are encroaching on the territory of global players such as U.S. giants Microsoft and Amazon, which dominate many markets around the world.

Chinese cloud providers have accelerated their global presence this year, thanks largely to the buzz around generative artificial intelligence (AI), which has led to a surge in global demand for computing services.

To gain an edge, Chinese players are increasingly targeting regions less plumbed by their U.S. counterparts, such as Southeast Asia and the Middle East.

In September, Huawei Technologies Co. Ltd. opened a new cloud service center in Saudi Arabia. The center “will be our focus in serving the Middle East, Central Asia and Africa,” said Jacqueline Shi, president of Huawei’s cloud global marketing and sales service, at its opening in Riyadh.

Tencent Cloud also moved into Saudi Arabia this year, partnering with the Gulf state’s telecom operator Mobily in February to further grow its global presence. The Chinese company’s business now covers regions including Asia, America, Europe, the Middle East and Africa.