Thunder makes a comeback to the cloud storage market—what are its intentions?
Author | Huang Yu
Nearly ten years after withdrawing from the independent network disk application market, Xunlei Ltd., an established Internet technology company, is coming back to this “cash-burning,” heavy-asset track.
On April 20, Xunlei officially opened public registration for its brand-new independent cloud storage product "Guang Ya Cloud Disk."
This tech company, once dominant in the download era, is now introducing slogans like “Register and get 2TB permanent space, download files without login, no speed limit, ordinary members enjoy 500TB,” appearing extremely aggressive in an industry now commonly contracting.
Ten years ago, China’s Internet witnessed a fierce wave of personal network disk purge.
At the time, due to heavy regulatory pressure, bandwidth cost black holes, and unclear profitability models, players such as Xunlei Kuaipan, Sina Weipan, and 360 Cloud all exited, handing hundreds of billions in market share to the few survivors like Baidu.
The industry ultimately cleared out, leaving only a few giants, who collectively shrunk free rights, limited non-member speed, strictly controlled sharing, and the network disks bid farewell to the era of wild growth.
Xunlei’s re-entry comes as the domestic network disk industry faces its toughest copyright regulation in history—the “Sword Net 2025” special action.
At a time when global tech giants are collectively pivoting to AI and computing power, why has Xunlei chosen to restart this heavy-asset, low-margin, slow-return “old tough business” now?
As “Sword Net 2025” is strictly regulating, combined with the accelerated arrival of the AI era, is a new business model taking shape in this traditional industry?
Ten Years of Ups and Downs
Xunlei’s move to return to the 2C network disk track is actually out of sync with the current market atmosphere.
A year ago, the domestic network disk industry saw the toughest “Sword Net 2025” special rectification campaign, making “network storage + full chain dissemination” one of six key points, and for the first time included private disk storage, offline resources, and overseas film and TV into regulation.
“Sword Net 2025” is not the first time regulators have cleaned up the network disk field.
As early as October 2015, the State Copyright Administration had issued a notice on “Standardizing Copyright Order of Network Disk Services.” Soon, there was a nationwide crackdown against pirated dissemination on cloud disks, and many disk enterprises invested large manpower and technical resources to intercept and block illegal accounts.
Against this background, the domestic personal network disk market underwent a fierce elimination round.
Around 2016, many players like UC Cloud, Sina Weipan, 360 Cloud, due to regulatory pressure, high costs, and profit difficulties, shut down or shrank their business.
Xunlei’s own personal network disk business also endured setbacks: in 2012, it launched “Xunlei Ark,” focused on sharing and discovery, but closed in 2014 due to copyright disputes; in 2016, impacted by industry reshuffling and regulation, Xunlei Kuaipan also announced an end to personal user storage services.
After two unsuccessful attempts with independent network disks, Xunlei stopped making standalone app disks, embedding cloud storage inside its main download app, now the commonly used Xunlei app’s cloud disk.
Since then, Xunlei's main focus has been downloading acceleration, blockchain, cloud computing, and live streaming services.
Still, Xunlei’s journey in recent years hasn’t been smooth; once ambitiously aiming for cloud computing, blockchain, and ecosystem dominance, it’s turned full circle, with stable, lucrative income still from subscription services (including download acceleration, storage, value-added experience).
Financial reports show Xunlei’s subscription income grew steadily from $91.2 million in 2021 to $154.8 million in 2025, a cumulative five-year increase of 69.7%, the only stable growth and highest gross margin and risk-resilient base business for Xunlei.
In March 2026, Xunlei sold 50% of NetXin Technology to Kingsoft Cloud, the main cloud computing entity regarded as Xunlei’s second growth engine, effectively half-divesting and only retaining a share of earnings.
Management said Xunlei will fully focus on: subscription + overseas live streaming. However, the dilemma is, as internet user growth peaks and download demand stagnates, the ceiling for subscription is obvious.
Entering the Cloud Disk Game
The launch of Guang Ya Cloud Disk is essentially Xunlei’s attempt to convert more highly sticky “member assets” through storage tools.
Zhang Yi, chief analyst at iMedia Consulting, told Wallstreetcn, “Sword Net 2025” significantly raised the compliance and content audit costs for network disks, forcing the industry to move away from piracy-driven traffic, entering a normalized compliance and concentration in head platforms.
“So, Xunlei is restarting its disk plan now: first, it is tapping into the market gap left by head platforms avoiding risk, though with clear risks; second, mainstream network disks universally limit speed and compress space, making the pain points of user experience explode; third, Xunlei’s own download business growth has hit bottom, and it needs to leverage its P2P technology advantage to find new growth.”
Internet analyst Ding Daoshi told Wallstreetcn, network disks serve as an entry point, boosting other businesses; so making money directly from network disk is secondary, the greater purpose is synergy—Kuake’s rapid rise is a typical example. “This is why many companies want to do network disks.”
Entertainment industry analyst Zhang Shule sees Xunlei’s rebooting of disk business as a value-added service to match download business.
Zhang Shule told Wallstreetcn that as users move away from PC, and phone storage is limited, there is demand for network disks, especially for oversize video files—users are reluctant to occupy long-term hard disk space; paywalls and content limits on long-form video platforms activate long-term storage needs. Although relatively niche, profits can be drawn out over time.
According to Zhiyan Consulting's report, in 2024, the number of active users in China’s personal network disk market reached 398.7 million, with 70% on PC and 30% on mobile. The huge scale provides broad growth prospects.
As user demands for disk capacity and download speed rise, willingness to pay also grows, rapidly expanding the overall market.
In 2024, China's personal network disk industry market size reached RMB 5.429 billion, up 11.96% year-on-year. Members account for about 51.6% of this, value-added services about 48.4%.
iMedia Consulting’s research also notes that, as people’s need for digital info storage grows, personal cloud disks have become a must-have for most.
But after 20 years, this somewhat saturated market is dominated by giants: Baidu Disk holds absolute leadership through its resource ecosystem; Alibaba Cloud Disk and Kuake rapidly grab market share; Tencent Weiyun backs up social files via WeChat and QQ; operator disks like Telecom and Mobile use broadband packages to retain bottom-tier users.
The concentration in China’s personal network disk market is increasing, with high bandwidth costs, lack of payment willingness, stricter regulations—three big hurdles—so most players are choosing to exit.
This means the network disk track has entered a “marathon” phase: competing on cost control, compliance boundaries, and sticky payment conversion.
Therefore, it won’t be easy for Xunlei to break through in the personal network disk market.
The Difficulty of Making Money
A report from iResearch notes that 27.7% of users mainly use network disks as piracy repositories. Many users see pirated content on network disks as a key factor in paying for membership, turning pirated content into a platform payment conversion tool, forming a “disk tolerates/condones piracy to attract users—users pay for faster download and more space” distorted business model.
Clearly, personal network disks are not just data storage—they have become platforms for pirated content distribution, one reason some disks could quickly acquire users early on.
Recently, Wallstreetcn has seen links sharing pirated dramas from Guang Ya Cloud Disk on some social platforms.
But under strict regulation, it will be much harder for Xunlei to gain users this way.
To attract more users, Xunlei’s Guang Ya Disk launched with “permanently free 2TB storage” for all users, and VIP expansion to 500TB for just RMB 108/year.
How generous is this? By comparison, Baidu Disk gives new SVIP only 5TB for a year at RMB 298; non-members pay RMB 88/year for 2TB and RMB 188 for 5TB.
Kuake, as a late entrant, offers slightly more competitive deals: SVIP gets 6TB/year, with annual packages for RMB 128.
Currently, HDD suppliers offer bulk cloud procurement at about RMB 100/TB, so 500TB would cost about RMB 50,000; but disk business makes money by pooling resources, deduplication, etc.
Besides large storage, Xunlei offers new users stacked benefits: 30-day VIP, unlocking unlimited speed downloads, HD playback, and 1TB large file uploads.
Unlimited speed targets the widely criticized speed limits on mainstream disks.
But a direct question arises: Can Xunlei make money doing this?
Zhang Yi sees Xunlei’s move as a classic aggressive customer acquisition tactic; short-term, it leverages P2P tech to dilute bandwidth cost, controls space through logical capacity and traffic tiers, using ultimate experience to grab users, then covers cost by converting to membership. The impact is strong short term.
“But long-term, it’s about user retention and payment conversion.”
The common industry consensus: with high costs, low payment conversion, severe homogeneity, personal network disks aren’t directly lucrative.
Cost-wise, cloud infrastructure is the main expense for personal network disks. A common misconception: people blame high storage costs for heavy assets; actually bandwidth costs are the bigger spend.
This is why Baidu Disk, Kuake, etc. never really relaxed speed limits for free users—limiting speed essentially controls losses.
A typical case: In November 2025, 123 Cloud Disk announced rights adjustment, mainly for free users—monthly free traffic dropped from 30GB to 10GB, and removed free download without login.
123 Cloud Disk said that rising traffic and bandwidth costs, plus some free users exploiting loopholes to mass-register, caused severe server resource strain and malicious usage.
Mainstream business model for China’s personal network disk is Freemium—revenue mainly from subscription, ads, value-added services.
Free users get basic capacity and speed-limited experience; paying users get more space and faster speed. Free attracts massive users, value-added screens paying users—almost all cloud storage providers follow this path.
Zhang Yi told Wallstreetcn: per active user annual rigid cost is RMB 200–350 for personal disks; silent users still cost nearly RMB 100/year. Core profit depends on payment rate, needs 15%+, but leading platforms are below this, so overall it’s strategic loss.
Zhang Shule thinks for giants, personal disk business mainly supplements main business, providing personalized services—even if they lose money. Many companies actually are not doing this to make direct profits.
The Difficult Road of Transformation
Under the pressures of regulation and costs, with the AI era accelerating, network disk businesses must improve user product experience to survive better.
Zhiyan Consulting points out that before 2016, China’s personal cloud disk market used the free model to grab market, with overall small revenue. After mid-2016, some disk providers shut down due to high costs; survivors sped up commercialization, offering memberships and value-added services, and more diverse privileges to paying users.
To find new profit growth, many disks are now establishing new business models beyond traditional personal disks.
For example, Kuake’s model is a combination of “ad-free search + AI universal assistant + membership bundle + ecosystem subsidies + scenario-based fission,” breaking out of the old monetization mode, forming an AI-centric service loop and growth flywheel.
Zhang Yi thinks industry evolution will force personal disks from simple storage tools to intelligent personal data hubs—AI multimodal processing, smart organization and so on, with AI as standard feature and main incremental revenue contributor; price wars won’t be sustainable.
For Xunlei, Guang Ya Disk’s launch is only “the first step of a long march.” It seized an industry reshuffling window, but if it wants to break the “profit curse” of the disk business, it must control costs and find a sustainable commercial path quickly.
The only constant in business is change, and even the apparently unattractive network disk market now may see exciting new stories.
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