Alibaba Cloud expands in South Korea with second data centre

Alibaba Cloud is preparing to open its second data centre in South Korea by the end of June 2025, as demand for AI infrastructure grows in the region. The move adds to the company’s efforts to expand internationally and keep pace with the rise in interest in generative AI tools and services.

“Our continued investment in local infrastructure is tied to the growing use of AI technologies in different industries,” said Yoon Yong-joon, Alibaba Cloud’s country manager for South Korea. “The new data centre will help customers run more flexible and reliable systems built for AI.”

Data centres play a central role in cloud computing by giving users access to storage, software, and hardware over the internet. In South Korea, demand for this infrastructure is rising fast. Analysts estimate the country’s data centre market was worth between US$5 billion and US$9.6 billion in 2024, with projections nearing US$10 billion by 2030. Seoul remains the key hub, supported by network density, major enterprise users, and public-sector backing.

Growth in edge computing is also expected to accelerate, with the local market projected to increase from US$178 million in 2024 to more than US$2.2 billion in value by the end of the decade. National programmes focused on AI, smart cities, and digital services have added further momentum.

Alibaba Cloud entered the Korean market in 2016 and launched its first data centre in Seoul in 2022. The company now operates 87 availability zones in 29 regions. Its facility in Seoul was built to meet local requirements around data handling, and cut latency for customers. By setting up infrastructure on the ground, Alibaba Cloud has been able to offer alternatives to larger US providers like AWS and Microsoft Azure. Its services are used in sectors including e-commerce, logistics, gaming, and AI.

In South Korea, companies like Univa and the Naver-backed app Snow have used Alibaba Cloud’s AI models to develop their services. Snow offers real-time features like video filters and AR tools, which are increasingly popular in Asia. Univa applies cloud-based AI to improve its enterprise offerings, helping speed up model training and inference.

Alibaba’s broader investment in AI has also been ramping up. According to the South China Morning Post, the company has set aside more than US$50 billion for the next three years to strengthen its AI infrastructure – roughly matching half the early investment in the US-based Stargate AI initiative. Its open-source Qwen models have gained traction among developers, and the cloud unit remains a key part of the group’s long-term strategy.

In Q1 of this year, Alibaba Cloud’s revenue rose 18 per cent to 30.13 billion yuan (about US$4.15 billion), marking its fastest growth in three years.

(Photo by Lightsaber Collection)

See also: AWS commits US$13b to Australia data centres

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