By Li Panpan
(JW Insights) May 11 -- The growth of large language models like ChatGPT will bring potential market demand for cloud computing in China, but has not resulted in immediate growth because of challenges like data privacy leaks, said a JW Insights article.
The explosive growth of ChatGPT is creating enormous traffic on AI. Some believe that artificial intelligence generated content (AIGC) will start a new round of prosperity in the cloud computing industry.
The operation of ChatGPT requires strong cloud computing support. On the evening of February 7, ChatGPT went down again due to a surge in visits, reflecting the massive demand for AI applications for cloud computing.
The cloud computing market is ushering in new opportunities. Chinese suppliers have started a new race on the way to promote their products continuously.
Alibaba Cloud, the cloud computing unit of Chinese tech giant Alibaba, is to reduce prices for core products by 15% to 50% and storage products by a maximum of 50%, marking the most significant price cut in its history, the company announced on April 26. (See the report https://jw.ijiwei.com/n/858923)
In the past ten years, Alibaba Cloud has reduced computing costs by 80% and storage costs by nearly 90%.
However, the cloud computing market still has not taken off so far, with large-scale language models like ChatGPT available, judging from the current market performance, said the JW Insights report. Statistics show that cloud computing has been adopted in China for less than 15% and the CPU usage rate in China's data center is only around 10%.
Data from Canalys shows that worldwide cloud infrastructure services spending increased 19% to $66.4 billion in the first quarter of 2023. While cloud remains one of the fastest-growing segments of the IT market, customer investments continue to slow in the face of continued macroeconomic uncertainties, with growth falling below 20% for the first time.
Regionally, Asia-Pacific saw the weakest performance as customer spending reduced in China, impacting many Chinese hyperscalers, said Canalys. And it expects global cloud services spending to continue to be slow through the second half of 2023.
The JW Insights article points out that the soaring demand for training resources will increase the demand for data center infrastructure construction. However, there are still many obstacles to the cloud computing market development.
With concerns for data privacy leaks, Samsung and others have officially banned generative AI tools such as ChatGPT. In January, Amazon also issued the same warning. Large banks such as JPMorgan Chase, Bank of America, and Citigroup were among the first companies to restrict employee access to ChatGPT. Such concerns are shared by Chinese corporations.
