Alibaba Cloud has decided to close down its data centre operations in Australia and India, which marks a strategic shift in its global infrastructure strategy. Despite previous assurances of continuity, the Chinese cloud giant confirmed the closure plans, citing a redirection of investments towards Southeast Asia and Mexico.
The decision impacts customers in Australia and India, who have been notified of the shutdown deadlines: 30 September for Australia and 15 July for India. After these dates, data stored in these regions will no longer be accessible, prompting Alibaba Cloud to advise customers to migrate to alternative data centres.
Alibaba Cloud’s move reflects broader geopolitical considerations. In Australia, where major global cloud players like AWS, Azure, and Google dominate, the decision comes amid cooling public sentiment towards Chinese investments. Meanwhile, despite its robust economic growth in India, strained bilateral relations between Beijing and Delhi likely influenced Alibaba Cloud’s exit strategy.
In contrast, Alibaba Cloud is eyeing expansion in Southeast Asia and Mexico, where it sees potential growth opportunities aligned with its data centre capabilities. The realignment also underscores Alibaba Cloud’s focus on optimising its global data centre footprint to maximise operational efficiency and market relevance.
The shift from Australia and India underscores Alibaba Cloud’s strategic focus on regions with favourable geopolitical and market conditions while consolidating its presence in high-growth markets like Southeast Asia and Mexico.
Amazon’s AWS, the leading global cloud computing provider, is intensifying efforts to draw the public sector into the realm of AI amidst fierce competition with Microsoft and Google in the generative AI domain. The initiative aims to demonstrate AI’s potential to enhance public services across health, security, and non-profit sectors, leveraging technologies like ChatGPT to streamline operations and improve outcomes.
Over two years, AWS has allocated a substantial $50 million fund to support public sector entities in exploring AI applications, offering cloud computing credits, training, and technical expertise to kickstart innovative projects. Currently serving thousands of government agencies, academic institutions, and nonprofits worldwide, AWS seeks to transition AI concepts into practical solutions that can effectively address public sector challenges.
Dave Levy, AWS’s vice president overseeing global public sector operations, highlighted the importance of moving from conceptualisation to implementation in public sector AI projects, underscoring the need for robust support to navigate complexities and achieve meaningful impacts. The push comes amid heightened competition as Microsoft and Google Cloud aggressively pursue public sector AI adoption, aiming to leverage vast datasets and AI capabilities to revolutionise service delivery and operational efficiency.
Amazon’s AWS remains committed to addressing challenges such as data privacy, security, and ethical considerations surrounding AI adoption in the public sector, emphasising rigorous security protocols and readiness for large-scale deployment.
Why does it matter?
As generative AI continues to evolve, AWS’s strategic focus on public sector adoption underscores its belief in AI’s transformative potential, aiming to lead the charge in integrating advanced technologies into governmental and non-governmental organisations worldwide.
The Israel Innovation Authority has announced plans to launch a tender next month to establish a supercomputer dedicated to training domestic large language models (LLMs). Announced at an event at Tel Aviv University, CEO Dror Bin explained this move was to ensure the country remains a global leader in AI technologies.
“When a high tech company or researcher wants to train a large model they have to buy time in the cloud (since), there is no local data centre with significant amount of GPUs (graphic processing units) that can train those models here,” he said.
Israel’s first supercomputer, built by Nvidia, completed its initial construction phase in November 2023, with the final phase slated for completion in 2024. However, it seems this new supercomputer will be more oriented towards industry and academia. “The supercomputer will be available for researchers and companies at lower than market cost,” Bin said.
Bin also presented research where he noted that the government is budgeting approximately $250 million (or 1 billion shekels) on a national AI programme, 60% of which will be used in 2024 alone. He had called for more investments in the sector earlier this month. Intel then announced it was halting the construction of a multi-billion dollar chip factory in the country. However, the same study revealed that Israel ranks third globally in this sector, behind the UK and US. This is corroborated by research done by Accel, where it ranked 3rd by funding and 4th by quantity of GenAI startups, behind Germany.
According to India‘s markets regulator, Infosys CEO Salil Parekh has settled charges related to insufficient internal controls to prevent insider trading during a 2020 contract. Parekh agreed to pay approximately $30,000 to settle the charge, which stemmed from a contract where Infosys provided a cloud-based record-keeping platform to US financial firm Vanguard.
The Securities and Exchange Board of India (SEBI) stated that Infosys failed to recognise certain unpublished price-sensitive information (UPSI) as such. Though SEBI did not specify the information, it held Parekh accountable for the lapse. In response, Infosys has implemented an internal policy to identify UPSI and now seeks approval from the board and audit committee for such information.
Additionally, Infosys has started breaking down the total contract value of deals into average revenue per annum for comparison with its annual revenue. The initiative aims to enhance transparency and prevent future lapses in internal controls.
Oracle has cautioned investors that a potential US ban on TikTok could negatively impact its financial results. A new law signed by President Biden in April could make it illegal for Oracle to provide internet hosting services to TikTok unless its China-based owners meet certain conditions. Oracle warned that losing TikTok as a client could harm its revenue and profits, as TikTok relies on Oracle’s cloud infrastructure for storing and processing US user data.
Analysts consider TikTok one of Oracle’s major clients, contributing significantly to its cloud business revenue. Estimates suggest Oracle earns between $480 million to $800 million annually from TikTok, while its cloud unit generated $6.9 billion in sales last year. The cloud business’s growth, driven by demand for AI work, has boosted Oracle’s shares by 34% this year.
Why does it matter?
The new law requires TikTok to find a US buyer within 270 days or face a ban, with a possibility of extension. TikTok, which disputes the security concerns, has sued to overturn the law. It highlights its collaboration with Oracle, termed ‘Project Texas,’ aimed at safeguarding US data from its Chinese parent company, ByteDance. Despite this, Oracle has remained discreet about its relationship with TikTok, not listing it among its key cloud customers and avoiding public discussion.
Amazon announced plans to invest €10 billion ($10.75 billion) in Germany, emphasising the country’s growing importance in cloud computing and retail. The majority of this investment, totalling €8.8 billion, will be allocated by 2026 to expand Amazon Web Services (AWS), particularly focusing on enhancing cloud infrastructure to support AI technologies across Europe.
German Chancellor Olaf Scholz hailed the investment, highlighting its potential to create over 4,000 jobs this year. That move comes amidst Germany’s economic challenges, including an energy crisis and bureaucratic hurdles that have hindered investment.
Amazon’s latest commitment brings its total planned investments in Germany to €17.8 billion, underscoring its long-term strategic focus on the country. Earlier reports indicated AWS’s consideration of multi-billion investments to expand data centres in Italy, further illustrating Amazon’s broader ambitions in Europe’s digital infrastructure sector.
The investment signals Amazon’s confidence in Germany’s business environment and its strategic position in Europe, aiming to bolster AWS’s AI and cloud services capabilities to meet increasing regional demand. That is expected to boost employment and enhance Amazon’s technological footprint in Europe’s largest economy.
Microsoft plans to invest 6.69 billion euros ($7.16 billion) in developing new data centres in Spain’s northeastern region of Aragon, enhancing the area’s reputation as a major European cloud computing hub. The regional government confirmed that Microsoft had applied for a construction permit for data centres outside Zaragoza, with the investment spread over ten years. The initiative follows Microsoft’s recent announcement of a 2.1 billion euro investment in data centres in Madrid.
Amazon Web Services (AWS) also has significant plans for Aragon, having announced a 15.7 billion euro investment over the next decade to build renewable energy-powered data centres in the region. Zaragoza, Spain’s fifth-largest city, is a logistics and transportation hub strategically positioned between Madrid and Barcelona along the key trade route connecting the Iberian Peninsula to France and the rest of Europe. The geographical advantage and Aragon’s substantial wind power capacity make it an attractive location for significant tech investments.
Oracle’s stock soared nearly 9% on Wednesday, propelled by surging demand for its cost-effective cloud infrastructure services, particularly from AI applications. The surge could boost the company’s market valuation by over $28 billion, adding to its current $340 billion valuation. With an 18% increase in shares since the beginning of the year, Oracle is capitalising on the momentum of its cloud infrastructure unit, which offers computing and storage services to businesses at competitive prices, positioning itself against major rivals like Google, Microsoft, and Amazon.
Oracle’s cloud infrastructure has garnered attention from AI startups, including Elon Musk’s xAI, thanks to its affordability compared to competitors. In a strategic move, Oracle recently announced partnerships with ChatGPT-maker OpenAI and Google Cloud to expand its cloud infrastructure offerings. That collaboration strengthens Oracle’s position as an AI platform and extends its database services distribution, as Evercore analyst Kirk Materne highlighted.
While Oracle’s forward earnings estimates stand at 19.59 times, lower than those of its major competitors, its fourth-quarter results missed expectations. Due to increasing competition from more cost-effective alternatives, the company faces challenges in its legacy database and enterprise resource planning (ERP) software business. Morningstar analyst Julie Sharma suggests that Oracle may experience customer churn as businesses undergo significant digital transformations, opting for cheaper database and ERP solutions over Oracle’s offerings.
At Apple’s annual developer conference on Monday, the tech giant is anticipated to unveil how it’s integrating AI across its software suite. The integration includes updates to its Siri voice assistant and a potential collaboration with OpenAI, the owner of ChatGPT. With its reputation on the line, Apple aims to reassure investors that it remains competitive in the AI landscape, especially against rivals like Microsoft.
Apple faces the challenge of demonstrating the value of AI to its vast user base, many of whom are not tech enthusiasts. Analysts suggest that Apple needs to showcase how AI can enhance user experiences, a shift from its previous emphasis on enterprise applications. Despite using AI behind the scenes for years, Apple has been reserved in highlighting its role in device functionality, unlike Microsoft’s more vocal approach with OpenAI.
The spotlight is on Siri’s makeover, which is expected to enable more seamless control over various apps. Apple aims to make Siri smarter by integrating generative AI, potentially through a partnership with OpenAI. The move is anticipated to improve user interactions with Siri across different apps, enhancing its usability and effectiveness. Also, Apple recently introduced an AI-focused chip in its latest iPad Pro models, signalling its commitment to AI development. Analysts predict that Apple will provide developers with insights into leveraging these capabilities to support AI computing. Additionally, reports suggest Apple may discuss its plans for using its chips in data centres, which could enhance cloud computing capabilities while maintaining privacy and security features.
The Apple Worldwide Developers Conference (WWDC 2024) will run until Friday, offering developers insights into app updates and new tools. Investors are hopeful that Apple’s AI advancements will drive sales of new iPhones and boost the company’s competitive edge amid fierce global competition.
China’s ByteDance, the parent company of TikTok, plans to invest around $2.13 billion to establish an AI hub in Malaysia. The plan includes an additional $320 million to expand data centre facilities in Johor state, according to Malaysia’s Trade Minister Tengku Zafrul Aziz.
The development follows significant investments by other tech giants in Malaysia. Google recently announced a $2 billion investment to create its first data centre and Google Cloud region in the country, while Microsoft is set to invest $2.2 billion to enhance cloud and AI services.
The investment is expected to boost Malaysia’s digital economy, aiming to increase its contribution to 22.6% of its GDP by 2025, underscoring the county’s growing importance as a digital economy hub in Southeast Asia.
