The Chinese cloud market is experiencing an unprecedented wave of price increases!

The Chinese cloud computing industry is experiencing a rare pricing reversal. Following Tencent Cloud, Alibaba Cloud and Baidu Intelligent Cloud have also announced price increases, marking a shift in the long-standing "continuous price decline" logic in the Chinese cloud market that has lasted for two decades, and an unprecedented price increase cycle is approaching.

On March 18th, Alibaba Cloud announced on its official website that due to the explosive global demand for AI, coupled with rising supply chain costs, it will adjust prices for AI computing power, storage, and other products, with increases of up to 34%. Alibaba Cloud's MaaS business achieved the highest growth rate in history from January to March this year, and Alibaba Cloud is prioritizing scarce AI computing resources towards Token-related businesses.

On the same day after the A-share market closed, Baidu Intelligent Cloud also released a price adjustment announcement, with AI computing power-related product services increasing by about 5%-30%, and parallel file storage increasing by about 30%. The two leading companies raised prices within less than four hours, highlighting that the tight supply and demand for AI computing power is being transmitted to price levels.

Morgan Stanley pointed out in a report earlier this week that cloud computing has always been a deflationary industry—larger scale leads to lower costs, and prices trend downward. The AI era is breaking this paradigm, and with the explosive growth in Token usage, an unprecedented price increase cycle is brewing in the Chinese AI cloud market.

For investors: In the context of rapidly expanding inference-side loads and upstream components and data center constraints raising marginal costs, the likelihood of cloud vendors regaining pricing power is increasing.

Historically Rare! Domestic Leading Cloud Service Providers Raise Prices Collectively

Alibaba Cloud's price adjustment covers AI computing power, storage, and other products, with increases of up to 34%. The reason is the explosive global demand for AI and rising supply chain costs. Informed sources added that the rapid growth in Token usage is changing the internal resource allocation priorities, and Alibaba Cloud will allocate more scarce computing power to Token-related businesses.

Baidu Intelligent Cloud's price adjustment also targets AI computing power and storage, with computing power products increasing by about 5%-30%, and parallel file storage increasing by about 30%. The simultaneous price increases of similar products by two leading companies on the same day indicate that "tight supply and demand" is moving from delivery and queuing cycles to more direct price signals.

Last week, Tencent Cloud announced a price increase, optimizing the billing strategy for certain models on its intelligent agent development platform, with the input price for the Tencent HY2.0 Instruct model significantly raised from the original 0.0008 yuan per thousand Tokens to 0.004505 yuan per thousand Tokens, an increase of 463.13%.

In addition to BAT, other domestic cloud service providers are also taking action. Wangsu Technology announced a price increase of 35%-40% for CDN products starting from February 1, 2026, and UCloud announced a price increase for all contract renewals and new customers starting from March 1, 2026.

On the overseas front, on January 4, 2026, AWS will raise the price of EC2 machine learning Capacity Blocks by about 15%. On January 27, 2026, Google Cloud announced significant price increases for network, storage, and AI infrastructure, with some CDN and data transmission rates increasing by as much as 100%, with the new prices taking effect from May 2026

Behind the Price Increase, Token Consumption Explodes

The penetration of AI Agent applications represented by OpenClaw has accelerated, resulting in a geometric leap in Token consumption compared to traditional conversational AI.

A previous report by UBS pointed out that the weekly Token usage of global AI models monitored through the API aggregation platform OpenRouter has reached approximately 16 trillion in recent weeks, nearly tripling compared to the level in January 2026 (before OpenClaw's launch).

Supply-side constraints come from chips. In terms of storage chips, the chairman of SK Group stated at the NVIDIA GTC conference that due to systemic bottlenecks in chip production, the global shortage of memory chips is likely to persist until 2030.

Regarding AI chips, the rental prices for H100/H200 have been significantly raised, with delivery cycles extended to 2027. Meanwhile, newly built computing centers have higher requirements for power supply and liquid cooling systems, with construction and operational costs significantly exceeding those of traditional data centers.

In a combination of explosive demand and constrained supply expansion, cloud infrastructure is more likely to enter an inflationary environment characterized by "cost-push + supply-demand tension."

The 20-Year "Price Reduction Inertia" is Easing, Is an Unprecedented Price Increase Cycle Coming?

Historically, cloud computing has been an industry of price deflation—larger scale leads to lower costs, which drives prices downward. However, Morgan Stanley pointed out that the AI era is breaking this paradigm, and an unprecedented price increase cycle is brewing, marking the first price adjustment cycle for Chinese AI cloud in 20 years.

Morgan Stanley analysts predicted in a report on March 16 that the compound annual growth rate of the Chinese AI cloud market (GenAI-related IaaS + MaaS) is expected to reach 72% from 2024 to 2029, with the market size soaring from RMB 15 billion in 2024 to RMB 218 billion in 2029.

The proportion of GenAI in China's total IaaS + PaaS market is expected to rise from 6% in 2024 to 39% in 2029, with AI cloud transitioning from a "marginal role" to the core growth engine of cloud computing.

More attention is drawn to the pricing elasticity on the profit side. Morgan Stanley estimates that for example, with Alibaba Cloud, a 1% price increase can boost the EBITA profit margin by 1 percentage point, or drive an 11% upward revision in EBITA forecasts. If the overall contract price increases by 10% (assuming 20% of contracts are renewed each year), the EBITA profit margin will expand by 4 percentage points