Alibaba Group Holding Ltd. today announced plans to invest 200 billion yuan, or about $28 billion, over the next three years to bolster its cloud infrastructure, an investment equivalent to more than half of its revenue in the fiscal year ended March 2019.

Alibaba is the largest infrastructure-as-a-service provider in the Asia Pacific region, with a market share that Gartner Inc. last year pegged at 19.6%. In China, the company’s home market, it’s estimated to command a 46.4% share as of the fourth quarter.

Alibaba said that it will use the $28 billion investment to boost in-house semiconductor and operating system development efforts, as well as to bolster its global data center network. The company’s cloud business currently operates 63 data center availability zones in 21 regions worldwide. From those availability zones, it offers not only access to cloud infrastructure but also other services such as hosted databases and machine learning tools.

Jeff Zhang, Alibaba’s chief technology officer, said in a statement that “by increasing our investment on cloud infrastructure and fundamental technologies, we hope to continue providing world-class, trusted computing resources to help businesses speed up the recovery process, and offer cloud-based intelligent solutions to support their digital transformation in the post-pandemic world.”

Alibaba’s cloud business sales jumped 62% last quarter to 10.7 billion yuan, or about $1.5 billion at the current exchange rate, momentum that the new investment should support. The cloud business is among the fastest-growing units of the Chinese e-commerce giant, which operates several online marketplaces for consumers and businesses.

Across its various divisions, Alibaba generated revenues of 161.5 billion yuan last quarter, the equivalent of about $22.8 billion. The company is expected to hold its next earnings call on March 20. 

Across the pond, fellow e-commerce and cloud giant Amazon.com Inc. is experiencing surging demand from consumers doing their shopping online amid the coronavirus pandemic. The company last week announced plans to hire 75,000 additional workers on top of the 100,000 it has already brought aboard since the middle of March to cope with the increased strain on its fulfillment network. 

Photo: Alibaba