NetEase is discontinuing one in all 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 as a consequence of a “enterprise technique adjustment.” Purchasers with unused credit can request refunds, in line with a message seen by the South China Morning Publish.
A customer support consultant confirmed the choice, advising clients emigrate to different cloud platforms earlier than the shutdown. The service’s area, 163yun.com, now redirects guests to Shufan, NetEase’s large information 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 group to speak with present customers to mitigate the influence on them,” the spokesperson added.
Strain from competitors and AI development
NetEase’s choice to shut its cloud service comes as China’s public cloud market experiences fast development pushed by synthetic intelligence (AI). In response to 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 growing demand for AI-related providers.
Nonetheless, AI cloud providers require vital funding. Alibaba lately introduced a $52 billion funding in cloud computing and AI infrastructure over the subsequent three years, the most important mission 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 centered on particular industrial functions like robotics and online game growth.
Strategic shift towards core enterprise
The closure represents NetEase’s strategic shift towards strengthening its core industries, significantly video gaming. The agency has been a key participant in China’s gaming business, and this adjustment suggests a transfer to consolidate assets and deal with markets the place it has a aggressive benefit.
Competitors in China’s AI cloud market is anticipated to develop as suppliers enhance investments in computing infrastructure and customised options. Lam stated main gamers will seemingly proceed to broaden their cloud capabilities to satisfy rising AI demand.
(Photograph by Unsplash)
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