Alibaba Expands AI Cloud Footprint In South Korea With New Data Hub Launching In June

Benzinga
2025.06.20 16:12
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Alibaba Cloud is launching its second data center in South Korea by the end of June to enhance its AI infrastructure, investing at least $53 billion over three years. This expansion follows the establishment of its first center in Seoul in 2022. Despite missing revenue estimates for the fourth quarter, Alibaba Cloud reported an 18% revenue increase, indicating strong growth. The move is part of Alibaba's strategy to diversify beyond China amid regulatory challenges and geopolitical tensions.

Alibaba Group Holding’s BABA cloud unit is set to launch its second data center in South Korea to capitalize on the generative AI frenzy.

The new center will be operational by the end of June, the South China Morning Post reported on Thursday, citing Yoon Yong-joon, Alibaba Cloud’s country manager.

Alibaba committed at least $53 billion over the next three years towards AI infrastructure ambitions.

Also Read: Alibaba Misses Revenue, But AI Cloud Has Silver Lining

Alibaba Cloud established its first data center in Seoul in 2022. It operates a network of 87 availability zones across 29 regions, making it the largest Chinese cloud service provider.

South Korea’s Univa and Naver-backed messaging app Snow have adopted Alibaba Cloud’s AI models.

China’s domestic regulatory crackdown on tech giants and geopolitical tensions with the U.S. prompted Alibaba to expand its presence beyond China.

Alibaba Chairman Joe Tsai had urged Asian companies to explore inter-Asia opportunities and the European market for growth amid intensifying geopolitical tensions. Tsai highlighted ample inter-Asia business activity, signifying the potential for engagement between East Asia, Southeast Asia, and South Asia. He also mentioned Europe as an opportunity for Asian companies.

Alibaba reported fourth-quarter revenue growth of 7% to $32.58 billion, missing the analyst consensus estimate of $33.08 billion. It clocked an adjusted earnings per ADS of $1.73, which beat the analyst consensus estimate of $1.48. Alibaba Cloud’s revenue rose 18% to $4.15 billion, marking its fastest growth in three years.

Price Action: BABA shares are trading lower by 0.33% at 113.12 at last check Friday.

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