(Yicai) June 27 -- Chinese cloud companies are leveraging their strengths in large language model technology to accelerate their expansion into overseas markets, where global heavyweights such as Amazon Web Services, Microsoft and Google still dominate.

"Artificial intelligence is no longer an isolated feature of cloud services, it is becoming a core design principle," Dai Kun, vice president and chief analyst at US market research firm Forrester, told Yicai. Chinese cloud providers are expanding their global AI cloud markets by serving both Chinese firms going abroad and local businesses. They are eyeing in particular emerging markets such as Hong Kong, Southeast Asia, the Middle East and countries along the Belt and Road Initiative.

"Chinese cloud providers offer more flexible and diverse pricing models, and technological obstacles are shifting away from the scale of infrastructure computing power to practical strengths such as engineering for specific business scenarios, innovation in applications, business consulting and ecosystem operations," said Dai.

To take RayNeo as an example, the consumer electronics company started to use Alibaba's Tongyi LLM to power its AI smart glasses earlier this year. A customized "cloud + edge" model was developed that enables multimodal AI interactions. These glasses are already on the market, and the Shenzhen-based company has set an overseas sales target for this year that is more than triple that of last year.

More companies like RayNeo are beginning to use Alibaba's open-source models, said Kang Min, vice president of the public cloud business unit at Alibaba Cloud Intelligence Group. Both global developers and companies building AI applications are adopting Alibaba's open-source models, due to the rapid iteration speed of Chinese developers.

"Open-source tools will play an important role in going global," Dai said. Chinese cloud firms should try to partner with large state-owned and internet companies with global potential as a starting point for their overseas expansion.

"This includes emerging tech areas, such as large AI models, intelligent agents, full-stack AI private clouds, sovereign clouds, smart manufacturing, automotive clouds, humanoid robots, and media entertainment, where Chinese firms have strong technical advantages and local experience,” he said.

By collaborating with local tech ecosystems, teaming up with influential domestic and global IT and consulting firms, and combining efforts to build open-source ecosystems, Chinese firms can accelerate their expansion into overseas markets, he said. However, compliance, local market insights, cultural differences and ecosystem integration will still pose challenges for these companies.

In recent years, Chinese cloud companies have significantly ramped up their global expansion efforts. Alibaba Cloud has built new data centers in Thailand, Mexico and Malaysia, Huawei Cloud has launched service nodes in the Philippines and Egypt, and Tencent Cloud plans to invest USD650 million to build data centers in Saudi Arabia and Indonesia. Tencent Cloud's revenue in the Asia-Pacific region has surged by over 50 percent year-on-year. This reflects the growing importance that Chinese cloud providers are placing on overseas markets.

Editor: Kim Taylor