China Cloud Spend Hits $14.7 Bn as AI Agent Adoption Accelerates

China’s spending on cloud infrastructure services reached $14.7 billion in the fourth quarter of 2025, representing a 26% year-on-year increase. 

The data, shared by global market research firm Omdia, attributed the growth to the extension of basic AI models used to support broader cloud infrastructure consumption and enterprise AI deployments.

“The rapid emergence of OpenClaw in China has further heightened market attention on this shift. More importantly, it has given the market a clearer view of how agents can connect workflows, tool use, and external systems through conversational interfaces, while being packaged into product forms that are more closely aligned with business processes,” said Omdia. 

The report states that Big Tech companies are now narrowing their focus on specific AI use cases. 

Tencent Cloud is emphasising the value of the inference layer, while Alibaba Cloud is focusing more on the enterprise platform layer. “Meanwhile, continues to advance AI deployment through industry scenarios, with a stronger emphasis on the integrated development of models, platforms, and solution capabilities.”

Alibaba Cloud, the market leader with a 37% share, capitalised on this shift by launching an enterprise-grade AI-native agent platform named Wukong. 

The cloud computing subsidiary of Alibaba Group also released the Qwen3.5 model and expanded its regional footprint by opening a fourth data centre in Japan.

Huawei Cloud maintained its position as the second-largest vendor with a 17% market share. The company launched an Industry AI Foundry for smart healthcare and introduced a $28.9 million ecosystem fund to support AI partners. Furthermore, its CodeArts intelligent coding agent recorded a sevenfold increase in users following its public beta release.

Tencent Cloud, holding an estimated 10% share, upgraded its agent development platform and consolidated its offerings under the TokenHub framework. The provider also plans to add a new cloud availability zone in Frankfurt to strengthen its European presence.

According to another report from Mordor Intelligence, large companies, including banks, manufacturing firms, internet platforms, and telecom providers, account for ~59% of cloud spending in China. While LLMs such as Alibaba’s Qwen or Tencent’s Hunyuan run on their own cloud infrastructure, independent model developers like DeepSeek, Kimi, and GLM operate in a distributed setup.

These models typically rely on domestic cloud platforms for deployment and access rather than owning full-scale infrastructure. For instance, DeepSeek is offered across multiple clouds, including Alibaba Cloud and Huawei Cloud, while Kimi’s agent workloads have been deployed on Alibaba Cloud infrastructure.

Omdia forecast that China’s cloud infrastructure services spending will grow by an additional 26% throughout 2026. The technology market research firm also stated that ecosystem collaboration will dictate future expansion, as partner-driven revenue already accounts for 25% of the market. 

Such collaborations have long been at play in the Chinese AI ecosystem. According to a recent Bloomberg report, Alibaba Group and Tencent Holdings are in talks to invest in AI startup DeepSeek, in a deal that could value the company at over $20 billion. 

At the same time, DeepSeek has worked closely with Huawei to optimise its latest V4 model for Huawei’s Ascend chips, allowing deployment across the company’s full AI computing stack.