The Chinese cloud market is experiencing an unprecedented wave of price increases!

China’s cloud computing industry is experiencing a rare reversal in pricing. Following Tencent Cloud, Alibaba Cloud and Baidu Intelligent Cloud have also announced price hikes, signaling the loosening of the longstanding “continuous price reduction” logic in China’s cloud market. An unprecedented price increase cycle is dawning. At noon on March 18th, Alibaba Cloud announced on its official website that due to the global explosion in AI demand, compounded by supply chain price hikes, it will adjust prices for products such as AI computing power and storage, with a maximum increase of 34%. Alibaba Cloud’s MaaS business “Bailian” hit a record-high growth rate from January to March this year, and Alibaba Cloud is tilting its scarce AI computing power resources toward Token-related businesses. After the close of the A-share market on the same day, Baidu Intelligent Cloud also released a price adjustment announcement: AI computing power-related products and services will see price hikes of about 5%-30%, and parallel file storage will see increases of about 30%. The successive price hikes by two leading vendors within less than four hours highlight that the tight supply-demand for AI computing power is being reflected in prices. Earlier this week, Morgan Stanley pointed out in a report that cloud computing has always been a price-deflation industry—the larger the scale, the lower the cost, the lower the price. The AI era is breaking this paradigm. With the explosive surge in Token calls, an unprecedented price hike cycle is taking shape in China’s AI cloud market. For investors: As inference-side workloads expand rapidly and upstream components and data center constraints push up marginal costs, the possibility for cloud vendors to regain pricing power is rising. Historic Rarity! Leading Domestic Cloud Service Providers Raise Prices Together Alibaba Cloud’s price adjustments cover AI computing power and storage products, with the highest increases up to 34%. The reason is the global surge in AI demand and supply chain price hikes. Insiders further stated that the rapid growth in Token calls is changing internal resource allocation priorities, and Alibaba Cloud is leaning more scarce computing power toward Token-related businesses. Baidu Intelligent Cloud’s price increase similarly targets AI computing power and storage: computing power products are up by about 5%-30%, parallel file storage by about 30%. When similar products from two major vendors are raised on the same day, it means “tight supply and demand” is shifting from delivery and queueing cycles to more direct price signals. Last week, Tencent Cloud had already announced price hikes. Its agent development platform optimized billing strategies for some models, with the price for Tencent HY2.0 Instruct model input raised from 0.0008 yuan/1,000 Tokens to 0.004505 yuan/1,000 Tokens, an increase of 463.13%. Beyond the BAT, other domestic cloud service providers are also taking action. Wangsu Technology announced it will raise CDN product prices by 35%-40% starting February 1, 2026; UCloud announced it will raise prices for all contract renewals and new customers starting March 1, 2026. Overseas vendors: On January 4, 2026, AWS will raise prices for EC2 Machine Learning Capacity Blocks by about 15%. On January 27, 2026, Google Cloud announced major price increases for network, storage, and AI infrastructure, with some CDN and traffic transmission rates rising up to 100%. The new prices take effect from May 2026. Behind the Price Hikes: Explosive Growth in Token Consumption AI Agent applications, represented by OpenClaw, are accelerating their penetration, causing Token consumption to leap geometrically compared to traditional conversational AI. A previous UBS report noted that monitored global weekly Token usage via API aggregation platform OpenRouter had reached about 16 trillion in recent weeks, nearly tripling the levels seen in January 2026 (before OpenClaw launched). Supply-side constraints come from chips. For storage chips, the chairman of SK Group said at the Nvidia GTC conference that due to systemic bottlenecks in chip production, the global memory chip shortage may persist until 2030. For AI chips, rental prices for H100/H200 have surged, delivery cycles been extended until 2027. Meanwhile, new computing power centers require higher standards for power supply and liquid cooling systems, and construction and operating costs are significantly higher than traditional data centers. In the combination of exploding demand and limited supply growth, cloud infrastructure is more prone to enter a “cost-driven + supply-demand tension” inflationary environment. Twenty Years of “Price Reduction Inertia” Loosen: Is an Unprecedented Price Increase Cycle Coming? Historically, cloud computing has always been a price-deflation industry—the larger the scale, the lower the cost, the lower the price. Yet Morgan Stanley points out the AI era is breaking this paradigm; China’s AI cloud pricing is about to start its first price-increase cycle in 20 years. Morgan Stanley analysts predicted in a March 16 report that China’s AI cloud market (GenAI-related IaaS+MaaS) will see a compound annual growth rate of 72% from 2024 to 2029, with the market size jumping from RMB 15 billion in 2024 to RMB 218 billion in 2029. GenAI’s share of China’s total IaaS+PaaS market will rise from 6% in 2024 to 39% in 2029, with AI cloud transforming from a “marginal side player” to the core growth engine of cloud computing. What gets more attention is the pricing flexibility at the profit end. Morgan Stanley estimates: For Alibaba Cloud, for each 1% price increase, EBITA margin can rise by 1 percentage point, potentially raising EBITA forecast by 11%. If overall contract prices rise by 10% (assuming 20% of contracts are renewed annually), EBITA margin will expand by 4 percentage points. Risk Warning and Disclaimer The market carries risks; investment needs caution. This article does not constitute personal investment advice, nor does it take into account the specific investment objectives, financial circumstances, or needs of individual users. Users should consider whether any views, opinions, or conclusions in this article suit their specific situation. Investments made accordingly are at the user’s own risk.