Alibaba Cloud raises prices for domain name auctions amid AI compute price war
Alibaba Group Holding's cloud computing unit - the service handling the online broadcasting of the 2024 Summer Olympics - has announced that it raised prices on its domain name auction platform, as the company tries to deal with rising costs while grappling with price competition for artificial intelligence (AI) services.
Starting from August 1, starting bids for domain names on Alibaba Cloud will be raised to 199 yuan for ".com" addresses and 99 yuan for other top level domains, the company said in a statement published on its official website on Saturday. Hangzhou-based Alibaba owns the South China Morning Post.
Alibaba Cloud's auction platform allows potential buyers to bid for expired domain names managed through the company's registrar, offering users a chance to access previously owned domain names rather than purchasing new ones.
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The new prices are at least a 43 per cent increase from the previous 69 yuan starting bid for all domain names, which Alibaba announced in August 2023.
The company said it is hiking prices "after careful consideration" in response to "increasing service costs", but did not elaborate.
Alibaba Cloud has also been making adjustments to its other businesses. It has announced that it would be shutting down data centres in India and Australia in July and September, respectively, which the company said is part of an "infrastructure strategy update".
In other areas, the business has been slashing costs amid fierce competition with other Chinese tech giants. It announced a few rounds of price cuts over the past year for cloud computing - highlighted by Alibaba leaders as one of the tech giant's two core businesses along with e-commerce - as the adoption of artificial intelligence (AI) picks up steam and touches nearly every industry.
In February, Alibaba Cloud announced price reductions as high as 55 per cent for more than 100 core products for mainland customers, covering its elastic compute service, object storage service and database product categories. The company said at the time that it was the largest discount offering in its history.
It followed that up in April with steeper discounts for international users, slashing prices by up to 59 per cent for customers of its global compute, storage, network, database and big data products.
In a previous round, Alibaba Cloud slashed prices in May 2023 on a number of core products and services in China by up to 50 per cent.
Despite facing headwinds from geopolitical tensions and a lack of access to advanced chips, Alibaba Cloud is currently the biggest player on the mainland in terms of customer spending among cloud infrastructure service providers.
It accounted for 37 per cent of the market in the first quarter, followed by the cloud services of Huawei Technologies and Tencent Holdings, according to market analytics firm Canalys.
Last October, Alibaba chairman Joe Tsai said 80 per cent of China's technology companies and half of AI large language model companies run on Alibaba Cloud.
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