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The Tech Giants Growing Behind China’s Great Firewall

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The Tech Giants Growing Behind China's Great Firewall

The Tech Giants Growing Behind China’s Great Firewall

The Chart of the Week is a weekly Visual Capitalist feature on Fridays.

Every day, your feeds are likely dominated by the latest news about Silicon Valley’s biggest tech giants.

Whether it’s Facebook’s newest algorithm changes, Amazon’s announcement to enter the healthcare market, a new acquisition by Alphabet, or the buzz about the latest iPhone – the big four tech giants in the U.S. are covered extensively by the media, and we’re all very familiar with what they do.

However, what is less commonly talked about is the alternate universe that exists on the other side of China’s Great Firewall. It’s there that four Chinese tech giants are taking advantage of a lack of foreign competition to post explosive growth numbers – some which compare favorably even to their American peers.

Bizarro World

Like the “Bizarro Jerry” episode of Seinfeld, the Chinese-based tech giants look recognizably familiar – but markedly different – to the ones we know so well.

Alibaba

Likely the best known of China’s tech giants, Alibaba is the dominant online retailer in the country. The company had revenues of $25.1 billion in 2017 and is seeing that revenue grow at impressive speeds. In its most recent quarterly results (Q3, 2017), the company noted a 56% jump in revenue.

Amazon’s tough sell: Amazon does exist in the Chinese market, but it just has trouble competing with Jack Ma’s creation. Amazon has less than a 1% share of the e-commerce space in China, after a decade of trying to get a foothold. Further, Alibaba also runs AliCloud, which provides direct competition to Amazon’s AWS.

Baidu

Baidu is the largest search engine in China and also a leading player in AI. It’s the most visited website in China, and ranks #4 globally. The company will announce 2017 annual results in the coming weeks, after reporting a 29% jump in revenue in Q3 2017.

Google’s searching for a way in: Google was blocked in China in 2010 after refusing to filter search requests. However, since then, the giant has been able to take very small steps in entering the Chinese market – even though its signature search engine is still blocked, Google now has at least three offices in the country.

Tencent

Tencent has recently been in the news for its rapidly surging stock. The company, which owns the dominant social platform in China (WeChat), is now valued at over $500 billion. For those keeping tabs, Facebook is currently worth $550 billion.

It’s complicated: Facebook remains blocked by China, meaning that Zuckerberg and company can’t take advantage of a 1 billion plus market of people with growing buying power. Even if it found its way in, there are multiple social platforms in China and competition would be stiff.

Xiaomi

Dubbed as “China’s Apple”, Xiaomi is one of the world’s most valuable private companies. Things have been hot and cold for the ambitious smartphone manufacturer, but recently reports have surfaced that Xiaomi will IPO in the second half of 2018 for upwards of $50 billion.

Apple’s shine has dulled: Apple’s entrance into the Chinese market was once described as a success, but recently competition from domestic manufacturers has derailed that claim.

Crossing Over

After a new round of financing, Bytedance – a Chinese company specializing in short-form video – surpassed Uber as the most valuable startup in the world, valued at $75 billion.

bytedance tik tok

Unlike some of its peers, Bytedance has found success outside of China. Tik Tok, for example, has well over 300 million users world wide, and the company is making investments into other popular broadcasting platforms, such as Live.me.

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The World’s Biggest Cloud Computing Service Providers

Cloud computing service providers generated $270 billion in revenues last year, concentrated among a few giants.

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This tree map shows the biggest cloud computing service providers globally by market share.

The World’s Biggest Cloud Computing Service Providers

This was originally posted on our Voronoi app. Download the app for free on iOS or Android and discover incredible data-driven charts from a variety of trusted sources.

Today, the three largest cloud computing service providers command 66% of the global market.

Amazon, Microsoft, and Google have generated billions in revenues through their cloud infrastructure that provide the computing power companies need to store data. What’s more, most AI models are run on the cloud, creating a surge in computing demand for cloud providers.

The above graphic shows the largest cloud providers globally, based on data from Synergy Research Group.

Breaking Down the Cloud Market

Here are the world’s top cloud computing service providers based on enterprise revenues as of the fourth quarter of 2023:

ProviderCountryMarket Share Q4 2023
Amazon Web Services🇺🇸 U.S.31%
Microsoft Azure🇺🇸 U.S.24%
Google Cloud🇺🇸 U.S.11%
Alibaba Cloud🇨🇳 China4%
Salesforce🇺🇸 U.S.3%
IBM Cloud🇺🇸 U.S.2%
Oracle🇺🇸 U.S.2%
Tencent Cloud🇨🇳 China2%
Other🌐 Other21%

With 31% of the global market share, Amazon’s cloud division posted $24.2 billion in revenues over the quarter.

AWS is a major cash engine for the company, but growth slowed over 2023 as enterprises and startups cut back on tech spending. Annual sales growth compared to the same quarter last year grew by 13%—far below competitors Microsoft and Google, whose cloud divisions grew by 30% and 26%, respectively.

As we can see, U.S. firms make up the lion’s share of the market, while China’s Alibaba Cloud and Tencent Cloud together comprise 5% of the global share.

The AI Boom and the Cloud

Given that a significant chunk of AI models are run on the cloud, the industry may be positioned to see greater demand as momentum accelerates.

In fact, newer AI systems are as much as 10 to 100 times larger than older models. In line with this, major cloud providers are seeing high demand for cloud services to allow companies across financial to manufacturing sectors to run large language models on their platforms.

Today, 98% of companies globally rely on the cloud for at least one part of their business applications, which may present a market opportunity for the industry as advancements in AI continue to grow.

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