US Cloud Dominance? China Finds a Gap and Cuts a Path to the Middle East
May 11, 2025
No AI, just the dinobaby expressing his opinions to Zellenials.
‘How China Is Gaining Ground in the Middle East Cloud Computing Race” provides a summary of what may be a destabilizing move in the cloud computing market. The article says:
Huawei and Alibaba are outpacing established U.S. providers by aligning with government priorities and addressing data sovereignty concerns.
The “U.S. providers” are Amazon, Google, Microsoft, Oracle. The Chinese companies making gains in the Middle East include Alibaba, Huawei, and TenCent. Others are likely to follow.
The article notes:
Alibaba Cloud expanded strategically by opening data centers in the UAE in 2022 and Saudi Arabia last year. It entered the Saudi market by setting up a venture with STC. The Saudi Cloud Computing Company will support the kingdom’s Vision 2030 goals, under which the government hopes to diversify the economy away from oil dependency.
What’s China’s marketing angle? The write up identifies alignment and more sensitivity to “data sovereignty” in key Middle Eastern countries. But the secret sauce is, according the the write up:
A key differentiator has been the Chinese providers’ approach to artificial intelligence. While U.S. companies have been slow to adopt AI solutions in the region, Chinese providers have aggressively embedded AI into their offerings at a time when Gulf nations are pursuing AI leadership. During the Huawei Global AI Summit last year, Huawei Cloud’s chief technology officer, Bruno Zhang, showed how its AI could cut Saudi hospital diagnostic times by 40% using localized Arabic language models — a tangible benefit that theoretical AI platforms from Western providers couldn’t match.
This statement may or may not be 100 percent correct. For this blog post, let’s assume that it is close enough for horse shoes. First, the US cloud providers are positioned as “slow”. What happened to the go fast angle. Wasn’t Microsoft a “leader” in AI, catching Google napping in its cubicle? Google declared some sort of an emergency and the AI carnival put up its midway.
Second, the Gulf “nations” wanted AI leadership, so Huawei presented a “tangible benefit” in the form of a diagnostic time reduction and localized Arabic language models. I know that US cloud providers provide translation services, but the pointy end of the stick shoved into the couch potato US cloud services was “localized language models.”
Furthermore, the Chinese providers provide cloud services and support on premises plus cloud functions. The “hybrid” angle matches the needs of some Middle Eastern information systems professionals’ ideas. The write up says:
The hybrid approach plays directly to the strengths of Chinese providers, who recognized this market preference early and built their regional strategy around it.
The Chinese vendors provide an approach that matches what prospects want. Seems simple and obvious. However, the article includes a quote that hints at another positive for the Chinese cloud players; to wit:
“The Chinese companies are showing that success in the Middle East depends as much on trust and cooperation as it does on computing power,” Luis Bravo, senior research analyst at Texas-based data center Hawk…
For me the differentiator may not be price, hybrid willingness, or localization. The killer word is trust. If the Gulf States do not trust the US vendors, China is likely to displace yesterday’s “only game in town” crowd.
Yep, trust. A killer benefit in some deals.
Stephen E Arnold, May 11, 2025
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