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Alibaba to spend $28 billion in bid for cloud autonomy

Chinese internet giant Alibaba has announced it plans to invest $28 billion over the next three years in its cloud business, including the development of chips and an OS.

“By increasing our investment on cloud infrastructure and fundamental technologies, we hope to continue providing world-class, trusted computing resources to help businesses speed up the recovery process, and offer cloud-based intelligent solutions to support their digital transformation in the post-pandemic world,” said Jeff Zhang, head of Alibaba’s cloud business, according to Techcrunch.

This is being widely reported as a doubling down on the cloud business, which it is, but a profound subtext seems to be Alibaba’s desire to develop more of its own technology. That, in itself, is perfectly sensible, but when viewed in the context of the snowballing tensions between the US and China, especially the latter’s determination to make itself less exposed to trade restrictions from the former, then the announcement takes on some extra nuance.

Alibaba’s financial chest-beating comes just days after Chinese BSS vendor announced the addition of China Mobile as a strategic investor. China and the world’s biggest mobile operator is dropping around $200 million for a 20% stake in the company. As an added bonus, that will also make China Mobile less dependent on non-Chinese vendors for its software. Handy.

The circumstantial evidence is mounting of a major process of balkanisation in the global technology industry, with China and the US seeking to become totally independent of each other regarding hardware and software. That’s fine, but the last thing the rest of the world will need once we emerge from coronavirus financial purgatory is to be caught in the crossfire of a battle of economic wills between Donald Trump and Xi Jinping.

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