Highlights 

  • Mainland China’s cloud infrastructure market reached USD 12.4 billion in Q2 2025, up 21% year over year. 
  • AI remained the key demand driver as enterprises shifted toward industry-aligned and agent-based applications. 
  • Alibaba Cloud, Huawei Cloud, and Tencent Cloud recorded market shares of 34%, 17%, and 10% respectively. 
  • Rising capital expenditure across leading providers reflects deepening commitment to AI-native infrastructure. 
  • AI agents and ecosystem collaboration are emerging as next-stage growth catalysts. 

Omdia, part of Informa TechTarget, Inc. (Nasdaq:TTGT), reported that mainland China’s cloud infrastructure services market returned to over 20% growth in Q2 2025, reaching USD 12.4 billion, a 21% jump compared with the previous year. This marks the first quarter since early 2024 where growth exceeded the 20% threshold. 

Artificial intelligencecontinued to fuel demand. According to Omdia, enterprises are moving beyond basic model invocation and shifting toward more strategic, business-aligned implementations of AI. This includes sector-specific models, enterprise-trained proprietary models, and early adoption of intelligent agent systems designed to execute tasks with higher autonomy. 

AI-relatedinvestmentis increasing across China’s hyperscale providers. As foundation models expand in capability and toolchains mature, cloud vendors are scaling infrastructure to support broad enterprise adoption across multiple industries. 

Alibaba Cloud, Huawei Cloud, and Tencent Cloud Lead Market Momentum 

Alibaba Cloud retained its leadership position with a 34%market shareand 26%year-on-yeargrowth. The company posted eight consecutive quarters of triple-digit AI-relatedrevenuegrowth. Itscapital expenditurereached CNY 38.6 billion (USD 5.4 billion) in Q2, with plans to invest CNY 380 billion (USD 52.9 billion) over three years to expand AI and cloud infrastructure. 

Alibaba also introduced Qwen3-Max, a trillion-parameter foundation model designed for advanced enterprise analysis and agent-driven workflows. Its Agent Bay platform further supports a full-scale execution environment for AI agents. The company is expanding internationally, announcing new regions in Brazil, France, and the Netherlands. 

Huawei Cloud maintained its position as China’s second-largest cloud provider with 17% market share and 17% year-on-year growth. The company expanded its CloudMatrix architecture to 8,192 GPUs and strengthened industry-specific deployment across verticals, including manufacturing, finance, and automotive. Its upgraded ModelArts Versatile platform aims to simplify enterprise agent development with lifecycle management and integrated MCP tools. 

Tencent Cloud held a 10% market share, with accelerating revenue aided by increased GPU use and higher AI API token consumption. New open-sourced Hunyuan models and the launch of Agent Development Platform 3.0 position Tencent Cloud to support next-generation agent workflows. International expansion includes a USD 150 million investment for a Middle East data center in Saudi Arabia. 

Ecosystem Expansion and AI Agents Shape Next Phase of Growth 

Omdia noted that partner-driven cloud revenue accounted for 25% of the market in Q2 2025, reflecting a shift toward deeper ecosystem collaboration. As AI agents evolve from conversational tools to operational systems capable of executing business workflows, cloud platforms are investing heavily in agent development environments and end-to-end toolchains. 

This transition is expected to accelerate adoption and help enterprises convert AI capabilities into tangible business value. 

Conclusion 

Mainland China’s cloud infrastructure market is entering a new phase defined by heavy investment, advanced foundation models, and the rapid emergence of AI agents. With Alibaba Cloud, Huawei Cloud, and Tencent Cloud driving capital expenditure and platform upgrades, the region is positioning for continued expansion. As enterprises deepen their use of AI-native workflows, collaboration between ecosystems, cloud providers, and developers will play a central role in shaping the next decade of cloud-AI convergence.