- Alibaba hikes some prices by up to 34%, especially for GPU-intensive services
- Growing demand for AI and global chip shortage are to blame
- The semiconductor market will continue to grow
Alibaba Cloud has been forced to raise prices on many of its services, by as much as 34%, due to rising costs associated with acquiring the hardware needed for its data centers.
The Chinese cloud giant blamed rising global demand for AI on rising prices, which get worse as a service becomes more computationally intensive.
For example, many services are only seeing a slight increase of around 5%, but GPU-powered product lines are seeing an increase of around 25-34%.
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Alibaba Cloud price hikes driven by chip shortage
Increased pressure on supply chains due to the recent AI boom has led to increased costs for CPUs, GPUs, memory chips and storage. The effects are felt on personal, consumer and business products.
“Due to the explosion in global demand for AI and rising supply chain prices, the cost of purchasing basic hardware in the industry has increased significantly,” the company wrote in a customer review (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 not affected until they are renewed, 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 innovate your business.”
However, Alibaba is not alone: AWS has also been forced to increase the prices of its cloud computing services, while the enterprise and consumer versions of Microsoft 365 have also become more expensive in recent months.
Looking ahead, prices for cloud products in general could continue on an upward trajectory, with global semiconductor revenues on track to hit $1 trillion for the first time in 2026, according to Omdia forecasts.
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