The landscape of China’s cloud computing is undergoing a fundamental transformation as artificial intelligence shifts from a niche capability to the primary driver of infrastructure demand. According to the latest Frost & Sullivan data for 2025, the total market for full-stack AI cloud services—encompassing IaaS, PaaS, and MaaS—has reached 59.59 billion RMB. Alibaba Cloud remains the undisputed leader, commanding a 40.1% market share with revenues of 239 billion RMB, while Baidu, ByteDance’s Volcengine, and SenseTime follow as the trailing pack.
This shift in market leadership is accompanied by a radical change in how the industry measures value. The traditional metric of 'GPU hours' is being rapidly replaced by 'Token volume,' reflecting a transition toward Model-as-a-Service (MaaS) as the standard delivery method. By 2026, China’s daily average Token invocation has surpassed 140 trillion, representing a staggering 1,000-fold increase in just two years. This explosion in usage underscores how deeply generative AI is being integrated into the country's enterprise architecture.
Alibaba’s lead is attributed to its early and aggressive 'AI-first' strategy, which has integrated its Tongyi Qianwen models directly into its cloud infrastructure. However, the rise of Volcengine at 13.4% and SenseTime at 7.1% highlights a diversifying ecosystem. Specialized AI firms and social media giants are successfully leveraging their specific data advantages to challenge the established cloud incumbents, forcing a price war that is restructuring the economics of the entire sector.
Beyond simple compute power, the current market demands a fused approach that combines model training, inference platforms, and deployment tools. As the pricing systems for cloud services are rebuilt around output rather than hardware uptime, the focus is shifting toward efficiency and the 'democratization' of AI. This evolution suggests that the next phase of competition will be won not by those with the most chips, but by those who can provide the most cost-effective and accessible intelligence to various industries.