Alibaba Cloud, a subsidiary of China’s Alibaba Group, will open its second data center in South Korea later this month.

The new facility, located in Seoul, will focus on services for AI applications.

Alibaba Cloud entered the South Korean market in 2016.

Its first data center began operations in 2022 to address the growing demand for AI infrastructure in the region.

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🔗 Source: Yonhap

🧠 Food for thought

1️⃣ Alibaba’s expanding Asian cloud footprint follows years of strategic planning

Alibaba’s new South Korean data center represents a continuation of their methodical expansion across Asia that began nearly a decade ago.

The company first entered the South Korean market in 2016 through a partnership with SK C&C, a local IT service provider, establishing their initial presence well before opening their first data center in 2022 1.

This approach reflects Alibaba’s broader regional strategy, which began with their first international data center in Singapore in 2015, followed by Malaysia in 2017, as part of their systematic expansion beyond mainland China 2.

By 2019, Alibaba Cloud had already established operations in 18 data center regions globally, serving over 10,000 paying customers and building the infrastructure needed to compete with Western cloud providers 3.

The six-year gap between market entry and their first South Korean data center, followed by a three-year interval before this second facility, highlights Alibaba’s patient, long-term approach to building presence in strategic markets.

2️⃣ South Korea’s substantial AI investments create fertile ground for cloud expansion

Alibaba’s AI-focused data center launch aligns with South Korea’s national AI strategy and significant government investments.

The South Korean government has committed approximately 480 billion won (USD 349 million) to industrial AI projects in 2025 alone, with substantial allocations for AI factory development, chip technology, and autonomous vehicles 4.

This initiative is part of South Korea’s broader strategy to maintain its position as the world’s fourth-largest manufacturing hub by integrating AI across industries 5.

South Korea’s newly enacted AI Framework Act, effective January 2026, emphasizes public support for AI development, including funding for AI data centers and projects that enhance access to training data 6.

Alibaba’s timing is strategic, as their AI-focused data center opens just as these major government initiatives are being implemented, potentially positioning them as a key infrastructure provider in South Korea’s AI ambitions.

3️⃣ Tapping into one of Asia’s fastest-growing cloud markets

Alibaba’s expansion comes amid significant growth projections for South Korea’s cloud computing market, creating revenue opportunities.

The South Korean cloud market is expected to grow from USD 6.83 billion in 2025 to USD 19.89 billion by 2030, representing a compound annual growth rate of 23.82% 7.

This growth is being driven by robust technological infrastructure, government initiatives promoting cloud adoption like the “K-Cloud Project,” and increasing digital transformation across sectors 7.

In March 2024, the South Korean government allocated KRW 121.9 billion (USD 91.5 million) specifically to strengthen the domestic cloud sector, emphasizing AI’s role in digital transformation 7.

The public cloud segment, where Alibaba competes, is expected to dominate the market, reflecting widespread preference for accessible and affordable solutions across industries 8.

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