Baidu, Alibaba Lead China's $2.7B AI Cloud Market

China’s AI public cloud market surged 55 percent in 2024 to reach 19.6 billion yuan (US$2.7 billion), driven by rapid adoption of large language models (LLMs) and the emergence of agentic AI, according to consultancy IDC.

The market was led by Baidu and Alibaba Group Holding, each securing around 25% market share, while Tencent Holdings and Huawei Technologies followed. The sector’s growth reflects how AI innovation is reshaping entire industries at unprecedented speed. The timeline compressed significantly: from traditional AI applications like optical character recognition before 2022, to LLM dominance in 2023, and then to agentic AI—autonomous, task-oriented AI—emerging in just the second half of 2024.

Key Highlights

• China’s AI cloud market grew 55 percent to $2.7B in 2024
• Baidu and Alibaba each hold 25 percent share, leading the sector
• Agentic AI and machine learning platforms drive new growth

Among AI cloud service segments, computer vision remained the largest, expanding 34 percent to 8.1 billion yuan, led by Tencent and Baidu. Meanwhile, machine learning platforms surged 163.8 percent to 5.29 billion yuan, signaling uneven but rapid growth across different AI technologies.

The competitive landscape reveals a sharp contrast between general cloud and AI-specific services. While Alibaba Cloud leads general cloud infrastructure with 33 percent share, followed by Huawei (18 percent) and Tencent (10 percent), the AI cloud market is more evenly balanced, with Baidu leveraging AI expertise to compete directly with Alibaba.

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This shift shows how specialized AI capabilities are disrupting traditional market hierarchies, enabling players with focused expertise to gain ground in high-growth segments—even when they lack dominance in broader cloud services.