- Alibaba is increasing some prices by as much as 34%, especially for GPU-intensive services
- The growing demand for artificial intelligence and the global chip shortage are to blame
- The semiconductor market will continue to grow
Alibaba Cloud has been forced to raise the prices of many of its services, by as much as 34%, due to the rising costs associated with acquiring the necessary hardware for its data centers.
The Chinese cloud giant blamed rising global AI demand for the price hikes, which are progressively worse the more computing-intensive a service becomes.
For example, many services only experience a minor increase of around 5%, but GPU-driven product lines experience increases of around 25-34%.
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Alibaba Cloud price increases due to chip shortages
Increased pressure on supply chains due to the recent AI boom has caused CPUs, GPUs, memory chips and storage to increase in cost. The effects are felt across both personal, consumer and business products.
“Due to the explosion of global AI demand and the increase in supply chain prices, the procurement costs of core hardware in the industry have increased significantly,” the company wrote in a customer announcement (translated using machine learning). “After careful evaluation, we have decided to adjust the price of AI computing power, CPFS (intelligent computing version) and other services from April 18, 2026.”
Alibaba says current contracts are unaffected until renewal, so existing customers should prepare for potentially steep price increases.
Despite supply chain disruptions, Alibaba promises to “continue to provide stable, secure and efficient cloud computing services to help you achieve business innovation.”
However, Alibaba is not alone – AWS has also been forced to raise the prices of its cloud computing services, while business and consumer versions of Microsoft 365 have also become more expensive in recent months.
Looking ahead, cloud products in general may continue on an upward price trajectory, with global semiconductor revenue on track to reach $1 trillion for the first time ever in 2026 per Omdia forecast.
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