Alibaba Group Holding Ltd Forges Partnership With Nvidia

Chinese e-commerce giant Alibaba’s cloud computing arm AliCloud has partnered with Nvidia to work on cloud computing and artificial intelligence. AliCloud will invest $1 billion and hire over 1,000 data engineers to work on its deep learning and big data platform over the next three years. Under the terms of the deal, Alibaba’s cloud unit will use Nvidia’s silicon to run new services.

Alibaba to turn its vast data troves into a product

AliCloud has ramped up investments in data analysis and machine learning as it expects demand for data storage and processing from corporates and governments to fuel growth over the next decade. Alibaba has been opening data centers in several countries, including one in the Silicon Valley. AliCloud President Simon Hu said the company’s growth rate was “one of the fastest among global peers.”

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Hu said Alibaba’s plan was to turn the data security and data processing capabilities it had accumulated over the last decade into a product that it can provide to its clients. It “fulfills our vision of sharing our vast data troves that will create immense value to our users,” he told the South China Morning Post. According to Forrester Research, China’s cloud market will expand to $3.8 billion by 2020.

AliCloud has the broadest range of services

Forrester Research analyst Charlie Dai believes AliCloud has the broadest range of cloud services and alliances among mainland Chinese service providers. However, the Hangzhou-based e-commerce giant has entered the cloud business at a time when the market is witnessing intense price war. Nvidia’s deep learning capabilities could give Alibaba an edge over rivals, but competition is getting fiercer by the day.

AliCloud is still a small player compared to giants like Amazon Web Services. Analysts expect that AliCloud will account for more than $1 billion of Alibaba’s revenue by 2018. In Contrast, Amazon Web Services’ revenue jumped 78% YoY to $2.1 billion during the third-quarter of 2015. AliCloud is also expanding beyond basic cloud computing. Last year, it partnered with the Chinese Academy of Sciences to open a quantum computing laboratory.