Alibaba is emerging as China’s strongest AI enabler, according to Morgan Stanley’s latest 2H25 CIO survey.
Analyst Gary Yu said in a note to investors on Friday that the results are “one of the most bullish sets of findings for Alicloud,” with demand for its Qwen model and cloud services “expanding notably compared to the 1H25 survey.”
Morgan Stanley added that the survey results “reinforce our view that Alibaba is the best China AI enabler,” and expects Alicloud’s revenue growth to accelerate further in the second half of fiscal 2026.
The survey points to rising technology budgets and a strong shift toward artificial intelligence as 2026 approaches.
Morgan Stanley highlighted that “40% of CIOs plan to deploy GenAI through public cloud in the next 12 months, up from 28% in 1H25,” showing AI’s growing importance in enterprise spending.
Hyperscalers are becoming the preferred choice for large language model deployments. The bank notes that “47% of CIOs now favor hyperscaler vendors,” a 10-point increase, while interest in independent AI model developers has softened.
DeepSeek remains the most popular vendor, but Morgan Stanley said interest in its services “has decreased by 20 percentage points, now at 45%.”
In contrast, interest in Alibaba and its Qwen model “has grown significantly, rising to 30% in 2H25 from 18% in 1H25.” The bank expects interest to climb to 37% within three years, placing Alibaba ahead of DeepSeek, Huawei, Bytedance, and Tencent.
Alicloud is identified as the main market-share winner. Citing Omdia research, Morgan Stanley said Alibaba is “projected to receive the largest share of rising AI-related cloud spending,” supported by its leading 35.8% market share in China’s AI cloud services market.
