Alibaba Cloud raises prices up to 34% as AI boom drives hardware costs higher across China

Tencent sees 'better pricing environment' due to AI boom

Two more Chinese cloud giants have signalled price rises for their services, again due to the impact of AI on their supply chains. Alibaba Cloud was the first mover, yesterday announcing price hikes of between five and 34 percent and saying "the surge in global AI demand and rising supply chain costs" made the upwards changes inevitable. Baidu Cloud, which branded itself as an AI cloud years before generative AI lit a fire on the field, followed with its own announcement that states "To ensure the long-term, stable operation of the platform and service quality, we have structurally optimized the pricing of some products." The company will therefore increase the price of its AI-related services by between five and 30 percent, and hike the price of parallel file storage by "approximately 30 percent." Tencent Cloud appears not to have announced price rises, but on its earnings call yesterday, company president Martin Lau said "In recent months, we're seeing a better pricing environment, especially for memory and CPU." Chief Strategy Officer James Mitchell said suppliers of datacenter equipment are "prioritizing the biggest, most regular customers, which are the hyperscalers such as ourselves." "Therefore ... smaller cloud providers no longer have certainty that they can source supply, and they need to come to the hyperscalers. You know, the hyperscalers have been operating at low margins and so, you know, when the demand picks up, then, you know, we almost sort of as an industry have no choice but to pass through higher prices." Lau, however, pointed to a growing market for inferencing chips that cost less than the silicon needed to train models. The company president said Tencent realistically has a choice of one or two suppliers for training chips, but that Chinese companies and others are increasingly offering viable inferencing chips and they earn "much lower margin." So maybe Tencent's costs won't remain high for long, given the expected increase in inferencing workloads as more organizations put large language models to work. CEO Pony Ma said Tencent's cloud "achieved profit at scale due to increased enterprise demand for our industry-leading PaaS and SaaS products and supply chain optimization." Lau later said Tencent Cloud produced adjusted operating profit of around $725 million, and hailed that outcome as a result of the company's 2022 decision to focus on significant customers rather than chasing low-margin business. He also pointed out that Tencent Cloud could make more money, but the company continues to prioritize use of its GPU fleet for its own needs rather than renting them to customers. Tencent won $28.3 billion revenue in its fourth quarter, 13 percent year-over-year growth. Full-year revenue topped $109 billion and grew 14 percent year-over-year. Gross profit grew by 21 percent to exceed $65 billion. ®

Alibaba Hikes AI Computing Prices Up to 34% After Demand Soars

Alibaba Group Holding Ltd. is raising prices for its AI computing and storage products by as much as 34%, in response to demand and rising infrastructure costs. The company is hiking prices of its T-Head AI computing chips, such as the Zhenwu 810E, by 5% to 34%, the company said in a statement. Its storage service, known as Cloud Parallel File Storage, will also cost 30% more, it said. The price hikes emerged after Alibaba launched a major structural revamp this month to focus on monetizing AI. China's e-commerce leader has introduced a series of products, including an agentic AI service for businesses called Wukong, hoping to tap national enthusiasm for the technology. Alibaba shares rose as much as 3.2% in Hong Kong on Wednesday. Alibaba joins big tech giants from Alphabet Inc.'s Google to Tencent Holdings Ltd. in efforts to try and monetize AI-related services, responding in part to growing concerns that hefty AI investments aren't generating adequate returns. Tencent has taken initial steps to monetize the shift toward agentic AI. Last week, the company announced a more than fourfold price hike for its Hunyuan foundation models on its agent developer platform. At the same time, it began charging for third-party models from startups like Zhipu and Moonshot hosted on its cloud service, ending a free trial period. Google has also recently announced a plan to raise pricing. Just hours before Alibaba's announcement, Nvidia Corp. Chief Executive Officer Jensen Huang said the company is firing up manufacturing of H200 AI accelerators for customers in China, a sign of strong demand for AI computing power in the Asian country.

Alibaba Cloud lifts prices, blames AI and hardware costs

Compute, storage, and SaaS all slugged - even on Alibaba's own silicon Alibaba Cloud today informed users it will increase prices for many services by up to 34 percent. "Due to the surge in global AI demand and rising supply chain costs, the procurement costs of core hardware in the industry have increased significantly," states a price adjustment notice posted on Wednesday. "After careful evaluation, we have decided to adjust the prices of services," it adds. Updated price lists record dozens of services and instance types for which costs will rise by five percent. The cost of higher-end instances powered by GPUs will rise by 25 to 34 percent. Even instances running Alibaba's own software, like the PolarDB cloud-native database, cop the price rise. The cost of using accelerators in the Chinese cloud will rise by five to 30 percent. The increases even apply to Alibaba's homebrew Pingtouge Zhenwu 810E, a parallel-processing ASIC for AI applications said to match Nvidia's dumbed-down-for-China H20 GPU. Alibaba's notice says customers who purchased relevant services before April 18 2026, "will not be affected by this adjustment in your current order/billing cycle; the new price will apply at the start of your next renewal cycle." That appears to be good news for some Alibaba Cloud customers, as the outfit allows customers to subscribe to cloud services for one-or two-year terms, and in increments of three, six, and nine months. Alibaba's price hikes are probably reasonable in the context of surging memory prices which create unavoidable cost increases. Hiking prices for compute, however, looks a little opportunistic given last November Alibaba Cloud said it can't install servers fast enough to keep up with demand, and was rationing access to GPUs for customers who spend more money. The Chinese cloud has also previously claimed to possess resource optimization prowess that let it operate more efficiently than rival clouds. Alibaba Cloud is not the only hyperscaler to have hiked prices of late: AWS classily did it on an early January weekend, sneaking out news of a 15 percent hike for certain machine-learning-centric resources. ®

Alibaba Cloud bumps prices by up to 34% due to AI demand and hardware costs

* Alibaba is rising some prices by as much as 34%, particularly for GPU-intensive services * Surging AI demand and the global chip shortage are to blame * The semiconductor market will continue to grow Alibaba Cloud has been forced to rise prices across many of its services, and by as much as 34%, due to the increasing costs associated with acquiring the hardware needed for its data centers. The Chinese cloud giant blamed surging global AI demand for the price increases, which are incrementally worse the more compute-intensive a service becomes. For example, many services are only seeing a smaller increase of around 5%, but GPU-powered product lines are seeing rises of around 25-34%. Alibaba Cloud price hikes are because of the chip shortage Increased pressure on supply chains due to the recent AI boom has caused CPUs, GPUs, memory chips and storage to rise in cost. The effects are being felt across personal, consumer and enterprise products alike. "Due to the explosion of global AI demand and the rise in supply chain prices, the procurement cost of core hardware in the industry has risen significantly," the company wrote in a customer notice (translated using machine learning). "After careful evaluation, we have decided to adjust the price of AI computing power, CPFS (intelligent calculation version) and other services from April 18, 2026." Alibaba says current contracts are unaffected until renewal, and so existing customers must prepare for potentially sharp price hikes. Despite disruptions to the supply chain, Alibaba promises to "continue to provide stable, safe and efficient cloud computing services to help you achieve business innovation." However, Alibaba isn't alone - AWS has also been forced to increase prices for its cloud computing services, while enterprise and consumer versions of Microsoft 365 have become more expensive in recent months too. Looking ahead, cloud products in general could continue on an upward price trajectory, with global semiconductor revenue on track to hit $1 trillion for the first time ever in 2026 per Omdia forecasting. Follow TechRadar on Google News and add us as a preferred source to get our expert news, reviews, and opinion in your feeds. Make sure to click the Follow button! And of course you can also follow TechRadar on TikTok for news, reviews, unboxings in video form, and get regular updates from us on WhatsApp too.

Why Is Alibaba Stock Gaining Wednesday? - Alibaba Gr Hldgs (NYSE:BABA)

Price Hikes Across AI Portfolio The company said it is increasing prices for its T-Head AI computing chips by between 5% and 34%. It is also lifting prices for its Cloud Parallel File Storage service by 30%. The updated pricing applies to products including the Zhenwu 810E chip, Bloomberg reported Wednesday. The move underscores Alibaba's effort to convert heavy AI investment into near-term revenue ahead of its upcoming earnings report. The pricing changes follow an internal restructuring announced earlier this month, aimed at making AI a more significant profit driver. Competition Intensifies Across AI Market Alibaba is set to report earnings Thursday and continues to position AI chips as a core growth pillar. CEO Eddie Wu has said the company plans to invest more than $53 billion in infrastructure and AI development, with the potential for further expansion. Bloomberg noted Alibaba has been active in open-source large language models but has struggled to translate that into a clear commercial advantage. The company also lost a key model developer this month and has launched a Token Hub unit to consolidate its AI efforts. BABA Price Action: Alibaba shares were up 2.93% at $140.57 during premarket trading on Wednesday, according to Benzinga Pro data. Image via Shutterstock Market News and Data brought to you by Benzinga APIs To add Benzinga News as your preferred source on Google, click here.

Alibaba Joins Other Tech Giants in Raising AI Prices | PYMNTS.com

By completing this form, you agree to receive marketing communications from PYMNTS and to the sharing of your information with our sponsor, if applicable, in accordance with our Privacy Policy and Terms and Conditions. That's according to a report Wednesday (March 18) from Bloomberg News, which says this places the Chinese tech giant among several of its contemporaries hoping to make the most of heavy demand following major tech investments. The price increases include a 5% to 34% hike on the company's T-Head artificial intelligence (AI) computing chips and a 30% uptick in price for Alibaba's Cloud Parallel File Storage service. The company this week announced it had created a new business group dedicated to AI, led by CEO Eddie Wu and known as the Alibaba Token Hub (ATH) Business Group. The unit combines several divisions within the company, with the goal of capitalizing on the opportunity presented by AI agents powered by tokens. Wu argued in a letter shared in the announcement that these are due to take on a growing share of digital work. ATH takes its name from the tokens generated by AI models, Wu added. "ATH is built around a single organizing mission: create tokens, deliver tokens and apply tokens," he said. Also this week, Alibaba debuted an AI tool for its enterprise customers. The company's Wukong offering is available as a standalone desktop application or as part of the latest iteration of DingTalk, Alibaba's AI-powered workplace platform. According to the firm's announcement, Wukong can "coordinate multiple agents to handle complex tasks within a single interface." Other companies raising their pricing for AI-related service include Tencent, which recently announced a more than fourfold increase for its Hunyuan foundation models on its agent developer platform. Another Chinese firm, Baidu, plans to increase the price of its artificial intelligence cloud products by as much as 30% from next month, a spokesperson told Bloomberg. As the Bloomberg report points out, these price increases are a response to increasing concerns that steep AI investments have not produced sufficient returns. In other artificial intelligence news, PYMNTS wrote last week about a string of recent funding announcements that show how the market is moving toward infrastructure that helps businesses run AI across everyday workflows. The companies raising capital are developing everything "from agent infrastructure and compute platforms to governance software and industry-specific operating systems designed for actual work environments," that report said. "At the center is the recognition that deploying AI in enterprises is significantly harder," PYMNTS added. "Companies need orchestration layers for AI agents, governance systems to monitor model behavior, compute infrastructure for large-scale inference and vertical software that embeds AI across industries. Investors are now backing startups that deliver these operational essentials."

Alibaba to raise prices for its AI products, shares gain By Investing.com

Investing.com -- Alibaba Group will raise prices across several of its artificial intelligence computing and storage products, becoming the latest major technology firm to push through increases as demand for AI intensifies. The company's shares have risen around 3.7% in premarket trading on Wednesday. Alibaba will lift prices for its T-Head AI computing chips by between 5% and 34%, while its Cloud Parallel File Storage service will become 30% more expensive. The revisions include the Zhenwu 810E chip and follow a sweeping corporate overhaul aimed at sharpening the company's focus on monetizing AI. The e-commerce giant has rolled out new offerings, including an agentic AI service for businesses known as Wukong, part of an effort to capture what it describes as surging national enthusiasm for AI tools. The company also created a Token Hub unit to consolidate its AI portfolio and accelerate commercial gains. The moves come as rivals intensify their own push to turn AI spending into revenue. Tencent Holdings Ltd. recently announced a more than fourfold price increase for its Hunyuan foundation models, while Baidu plans to raise AI cloud product prices by up to 30% from next month. Google has also disclosed upcoming increases for some AI services. The latest price adjustment arrives just ahead of Alibaba's earnings report on Thursday. Reacting to the news, Morgan Stanley analyst Gary Yu highlighted that "AliCloud attributed the rise to booming AI demand and significant hardware cost increases." "This indicates the China clouds' price hike cycle is spreading from small players (Wangsu and UCloud) to industry leaders, and we expect more to come," the analyst added. "This price hike is in-line with our Alibaba bull case (50% cloud revenue growth in F27 with margin upside to 12-14% in F27-28)...which indicated that AliCloud has pricing power. We reiterate our OW and Top Pick for Alibaba." Morgan Stanley believes the update "has positive readacross to all AI model players and infra players, such as Minimax, Knowledge Atlas, GDS, VNET, Kingsoft Cloud."

China's Big Tech Firms Raise AI Prices as Demand Soars

China's tech titans are raising prices for AI services, signaling a potential inflection point in the race for monetization. E-commerce heavyweight Alibaba Group and search-engine giant Baidu on Wednesday became the latest to announce price hikes for artificial-intelligence offerings, accelerating the U-turn taking shape in an industry previously characterized by cutthroat discounting competition. Alibaba's cloud unit said it plans to raise prices for its T-head AI computing chips, such as Zhenwu 810E, by 5% to 34%. Prices of its storage service will increase by 30%. In a statement, Alibaba cited a surge in global AI demand and rising supply chain costs as the primary reasons for the price changes, which take effect April 18. Baidu meanwhile also plans to raise prices for its AI cloud products by as much as 30%, also from April 18, a spokesperson said. The moves stand in stark contrast to early 2024, when Alibaba slashed cloud computing services prices as much as 55%, swiftly sparking reciprocal cuts from rivals such as JD.com. Last week, Shenzhen-based tech giant Tencent also announced a price increase for its flagship Hunyuan large-language models. The wave of price hikes could be taken as a tentatively positive sign of companies' efforts to monetize AI-related services. Many of the biggest players have been striving to make AI a major revenue generator, at the expense of ballooning research-and-development budgets. For Alibaba, e-commerce remains the top revenue generator, but its AI and cloud businesses have been gaining traction. Earlier this week, the group restructured its AI business to solidify resources and improve profitability, and its earnings reports on Thursday will shed light on how its strategy has been paying off so far.