- Alibaba is increasing some prices by up to 34%, particularly for GPU-intensive services
- Blame the growing demand for AI and the global chip shortage
- The semiconductor market will continue to grow
Alibaba Cloud has been forced to increase prices for many of its services, by up to 34%, due to the rising costs associated with acquiring the hardware needed for its data centers.
The Chinese cloud giant blamed growing global demand for AI for price increases, which are getting worse the more compute-intensive a service becomes.
For example, many services are only seeing a minor increase of around 5%, but GPU-driven product lines are seeing increases of around 25-34%.
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Alibaba Cloud price hikes due to chip shortage
Increased pressure on supply chains due to the recent AI boom has caused the costs of CPUs, GPUs, memory chips and storage to rise. The effects are being felt in both personal, consumer and business products.
“Due to the explosion in global demand for AI and rising supply chain prices, the acquisition cost of core hardware in the industry has increased significantly,” the company wrote in a customer advisory (translated using machine learning). “After careful evaluation, we have decided to adjust the price of AI computing power, CPFS (smart computing version) and other services starting April 18, 2026.”
Alibaba says current contracts are not affected until they are renewed, so existing customers should prepare for potentially sharp 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 increase prices for its cloud computing services, while the enterprise and consumer versions of Microsoft 365 have also become more expensive in recent months.
Looking ahead, cloud products in general could continue on an upward price trajectory, with global semiconductor revenues on track to reach $1 trillion for the first time in 2026, according to Omdia forecasts.
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