Alibaba To Open Cloud-Computing Data Center in Silicon Valley

Alibaba continues to make inroads in the U.S. In a move that directly competes with, the Chinese Internet juggernaut announced Wednesday that Aliyun, its 5-year-old cloud-computing business, will open its first overseas cloud-computing data center in Silicon Valley.

Alibaba did not specify which city would house the center, when the facility would open or how much the company would spend to build it.

"For security reasons, we aren't disclosing the exact location," an Alibaba spokesman said.

The data center will initially serve Chinese enterprises in the United States, the company said, but the plan is to gradually expand its products and services to international clients in the second half of this year. It is to provide a variety of cloud-computing services that are intended to attract Chinese businesses as they develop various kinds of applications.

Although the center is also envisioned as catering to U.S. businesses, its China focus indicates that the company sees Chinese companies as becoming a bigger presence in Silicon Valley.

Aliyun already has data centers in the Chinese cities of Hangzhou, Qingdao, Beijing, Shenzhen and Hong Kong.

"Aliyun hopes to meet the needs of Chinese enterprises in the United States, and the ultimate objective of Aliyun is to bring cost-efficient and cutting-edge cloud computing services to benefit more clients outside China to boost their business development," Ethan Sicheng Yu, Aliyun's vice president, said in a statement.

Shares of Hangzhou-based Alibaba were up nearly 2% in morning trading on Wall Street, but otherwise have been falling since November, losing about $40 off their high of approximately $120.