NetEase is discontinuing considered one of its public cloud providers as competitors in China’s cloud computing market intensifies.
The Hangzhou-based web and gaming firm knowledgeable company purchasers on Friday that the service will go offline on April 7 on account of a “enterprise technique adjustment.” Purchasers with unused credit can request refunds, in response to a message seen by the South China Morning Publish.
A customer support consultant confirmed the choice, advising prospects emigrate to different cloud platforms earlier than the shutdown. The service’s area, 163yun.com, now redirects guests to Shufan, NetEase’s massive knowledge options enterprise.
A NetEase spokesperson stated the service was utilized by a small variety of purchasers in mainland China. “We have now organized a devoted workforce to speak with present customers to mitigate the affect on them,” the spokesperson added.
Stress from competitors and AI progress
NetEase’s choice to shut its cloud service comes as China’s public cloud market experiences speedy progress pushed by synthetic intelligence (AI). In line with analysts, the corporate has struggled to maintain up with the tempo of AI-related developments.
Ivan Lam, senior analyst at consultancy Counterpoint, famous that AI has created new momentum in China’s public cloud market. A report from IDC China in October said that the home market grew by 8% within the first half of 2024, pushed by rising demand for AI-related providers.
Nonetheless, AI cloud providers require vital funding. Alibaba not too long ago introduced a $52 billion funding in cloud computing and AI infrastructure over the subsequent three years, the biggest challenge of its form by a non-public Chinese language firm. ByteDance has additionally made substantial investments to strengthen its AI capabilities.
Li Chengdong, founder and chief analyst at Beijing-based consultancy Dolphin, stated NetEase lacks the aggressive fringe of its rivals. Whereas Alibaba and ByteDance have launched profitable general-purpose AI fashions—Alibaba’s Qwen and ByteDance’s Doubao—NetEase’s Fuxi AI fashions stay targeted on particular industrial purposes like robotics and online game growth.
Strategic shift towards core enterprise
The closure represents NetEase’s strategic shift towards strengthening its core industries, notably video gaming. The agency has been a key participant in China’s gaming trade, and this adjustment suggests a transfer to consolidate sources and give attention to markets the place it has a aggressive benefit.
Competitors in China’s AI cloud market is predicted to develop as suppliers enhance investments in computing infrastructure and customised options. Lam stated main gamers will doubtless proceed to develop their cloud capabilities to fulfill rising AI demand.
(Picture by Unsplash)
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