Omdia: Mainland China's cloud infrastructure market accelerates to 24% growth in Q3 2025
MWN-AI** Summary
According to a recent report by Omdia, Mainland China's cloud infrastructure services market saw remarkable growth of 24% year-on-year in Q3 2025, reaching a substantial $13.4 billion. This marks the second consecutive quarter of growth exceeding 20%, largely driven by heightened demand for artificial intelligence (AI) and a wider adoption of cloud computing resources in enterprise settings. As companies transition from initial AI trials to broader utility, there has been a significant shift towards using cloud resources for production workloads.
Omdia highlights that top cloud providers are enhancing their AI capabilities. The market shares for Q3 2025 showed Alibaba Cloud leading with 36%, followed by Huawei Cloud at 16%, and Tencent Cloud at 9%. Alibaba Cloud has particularly thrived, supported by strategic partnerships and an expanding portfolio of AI models. For instance, their recent release of the Qwen3-VL multimodal models demonstrates advancements in video processing and generative AI capabilities.
Huawei Cloud, the second-largest provider, reported a 14% year-on-year growth, emphasizing AI applications in industries like aviation through the co-launch of predictive models. Meanwhile, Tencent Cloud, while growing at a slower pace due to resource limits, has introduced enhancements to its agent development platform to support enterprise-level AI solutions.
As enterprises focus on the operational stability and reliability of their AI deployments, collaboration within the cloud ecosystem is set to grow, further adding value through partnerships. Omdia's analysis demonstrates a robust outlook for cloud infrastructure services in China, underpinned by ongoing innovation in AI technology and strong market competition among the leading providers.
MWN-AI** Analysis
The Q3 2025 report by Omdia indicates a robust 24% year-on-year growth in Mainland China's cloud infrastructure market, reaching a substantial $13.4 billion. This sustained growth is powered by increasing demand for Artificial Intelligence (AI), driving enterprises from experimentation to full-scale cloud adoption. Investors and stakeholders should recognize this trend as a significant signal for opportunities within the cloud services sector.
Alibaba Cloud, holding 36% market share, continues to lead the pack, with AI-related revenues experiencing triple-digit growth. The launch of advanced AI models and partnerships with major corporations illustrate its strategic positioning. This suggests long-term stability and growth potential for Alibaba as it capitalizes on expanding enterprise deployments. Investors might consider Alibaba’s stock as a barometer for the wider sector's health.
Huawei Cloud, with a 16% share and a year-on-year growth of 14%, is also strategically positioned, particularly with deployments in industry use cases. Its focus on AI-driven solutions for key industries will likely enhance its market penetration and competitiveness. While the growth is not as aggressive as Alibaba's, it remains a viable player that could yield steady returns, especially in the enterprise sector.
On the other hand, Tencent Cloud, with only a 9% market share, faces challenges in scaling its AI computing resources. Although recent enhancements in agent workflows indicate efforts to improve competitiveness, its more cautious growth strategy may be a concern. Investors should monitor Tencent closely; while the current limitations are evident, future advancements could alter its growth trajectory.
In conclusion, with AI revenues driving growth, the cloud infrastructure market in China presents promising investment avenues, particularly in Alibaba and Huawei. Continuous observation of Tencent's developmental strategies will be crucial for a comprehensive investment outlook in this sector.
**MWN-AI Summary and Analysis is based on asking OpenAI to summarize and analyze this news release.
According to Omdia, Mainland China’s cloud infrastructure services market reached $13.4 billion in Q3 2025, growing 24% year on year. This marked the second consecutive quarter of growth above 20%. Sustained AI demand continued to drive adoption while generating spillover effects across core cloud infrastructure services, accelerating the shift in cloud resource consumption toward production workloads. In response, leading cloud providers continued to build out AI capabilities. They also placed greater emphasis on the productization and role differentiation of models, while strengthening the toolchains that underpin AI agent platforms. In Q3 2025, the market shares of Alibaba Cloud, Huawei Cloud, and Tencent Cloud were 36%, 16%, and 9%, respectively.
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Mainland China cloud infrastructure services spend, Q3 2025
In Q3 2025, Mainland China’s cloud infrastructure services market continued to rebound, with year-on-year growth reaching 24%. As enterprises moved beyond early-stage AI experimentation toward broader adoption, AI increasingly drove incremental demand for core cloud infrastructure services, including compute, storage, and database.
“As AI adoption deepens, leading cloud vendors are complementing ongoing improvements in foundation model capabilities by positioning these models as functional components within a broader platform stack,” said Rachel Brindley, Senior Director at Omdia . “Clearer role definition and tighter platform integration are becoming an increasing focus.”
During the quarter, Alibaba Cloud expanded its multimodal model portfolio; Huawei Cloud accelerated AI adoption in core industry use cases through the co-launch of industry models; and Tencent Cloud clarified model role differentiation within its Hunyuan 2.0-based HY 2.0 Think and Instruct lineup.
As AI deployments scale into production, enterprise priorities are shifting toward platform-level reliability and operational stability. “Individual model performance alone is no longer sufficient to meet enterprise needs in real-world use cases,” said Yi Zhang, Senior Analyst at Omdia . “The central challenge in scaling AI initiatives lies in orchestrating models, data, tools, and workflows within complex systems in a way that enables reuse, operationalization, and commercialization.”
Against this backdrop, leading cloud providers showed increasing convergence in AI Agent platform strategies in H2 2025. Alibaba Cloud, Huawei Cloud, and Tencent Cloud all began advancing their agent development platforms beyond capability demonstration toward a more engineering-led, operationally scalable stage, with systematic upgrades across MCPs, workflows, knowledge bases, and plugin frameworks supporting this shift. These developments are laying the groundwork for the commercialization of generative AI.
In Q3 2025, partner-driven cloud revenue represented 25% of the market, with the share expected to grow further as ecosystem collaboration plays a larger role in translating AI adoption into business value.
In Q3 2025, Alibaba Cloud increased its market share to 36%, maintaining its leadership in China’s cloud infrastructure services market. AI-related revenues have recorded triple-digit growth for nine consecutive quarters. This has been supported by expanding enterprise adoption and strategic AI partnerships with Marriott, GAC Group, L’Oréal China, and Haier across key industry verticals. Alibaba Cloud’s recent AI upgrades have focused on application enablement and platform usability across its Qwen model family. In October, it released nine Qwen3-VL multimodal models, strengthening video understanding and spatial perception capabilities. This was followed by the launch of the Wan2.6 video generation series, including Wan2.6-R2V, China’s first reference-to-video generation model, advancing video generation toward production-grade deployment. In December, it introduced AgentRun, a serverless-based service designed to support production-grade deployment and operation of AI agents. On the global infrastructure front, it continued to expand its global footprint, bringing its second data center in Dubai online in October.
Huawei Cloud maintained its position as the second-largest cloud infrastructure services provider in China in Q3 2025, reporting stable performance with year-on-year revenue growth of 14% and a market share of 16%. During the quarter, Huawei Cloud continued to advance AI adoption in industry settings, co-launching the Tianji Predictive Model 1.0 with China Southern Airlines. Built on Huawei Cloud Stack and AI-driven predictive capabilities, the model exemplifies Huawei Cloud’s efforts to deploy AI across key industries, including aviation and manufacturing. In October, it upgraded its AI agent development platform, enhancing core components, including MCP services, workflows, knowledge bases, and plugin frameworks, and adding more than 80 official prebuilt MCP tools to strengthen agent development and orchestration capabilities. Internationally, Huawei Cloud announced that the third availability zone of its Ireland region will come online in early 2026, supporting continued growth in cloud and AI demand across Europe.
Tencent Cloud accounted for around 9% of China’s cloud infrastructure services market in Q3 2025. Growth remained constrained by limited availability of advanced AI computing resources, with Tencent adopting a balanced compute allocation approach, supporting customer-side AI capability delivery while advancing internal AI applications and product iteration. In November, Tencent Cloud launched HY 2.0 Think and HY 2.0 Instruct, enhancing complex reasoning and agent workflows while supporting stable, scalable enterprise AI deployment. In December, Tencent Cloud further enhanced its Agent Development Platform (ADP), upgrading capabilities across MCP plugins, workflow orchestration, knowledge management, and tooling. Separately, the company announced the commercial billing of its RAG-based models used within its agent development platform, marking a step toward scalable, production-grade agent deployment.
Omdia defines cloud infrastructure services as the sum of bare metal as a service (BMaaS), infrastructure-as-a-service (IaaS), platform-as-a-service (PaaS) and container-as-a-service (CaaS) and serverless that are hosted by third-party providers and made available to users via the Internet.
ABOUT OMDIA
Omdia , part of Informa TechTarget, Inc. (Nasdaq: TTGT), is a technology research and advisory group. Our deep knowledge of tech markets grounded in real conversations with industry leaders and hundreds of thousands of data points, make our market intelligence our clients’ strategic advantage. From R&D to ROI, we identify the greatest opportunities and move the industry forward.
View source version on businesswire.com: https://www.businesswire.com/news/home/20260209034854/en/
Fasiha Khan: fasiha.khan@omdia.com
Eric Thoo: eric.thoo@omdia.com
FAQ**
How is TechTarget Inc. (TTGT) leveraging the growth of Mainland China’s cloud infrastructure services market, especially with Alibaba Cloud's 36% market share and strong AI-related revenues?
What strategies are Alibaba Cloud, Huawei Cloud, and Tencent Cloud using to align their AI capabilities in response to the 24% year-on-year growth in the cloud services market, as reported by TechTarget Inc. (TTGT)?
In what ways could the competitive dynamics among Alibaba Cloud, Huawei Cloud, and Tencent Cloud evolve in Q4 2025, considering the collaborative ecosystem growth highlighted by TechTarget Inc. (TTGT)?
How might TechTarget Inc. (TTGT) benefit from the projected increase in partner-driven cloud revenue as part of the broader ecosystem collaboration in the Mainland China's cloud market?
**MWN-AI FAQ is based on asking OpenAI questions about TechTarget Inc. (NASDAQ: TTGT).
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