Alibaba Group Holding, Ltd has opened its first cloud computing hub outside China in Silicon Valley.

In so doing, the Chinese e-commerce giant has signaled its willingness to take on some of the toughest competitors in the U.S. tech industry: Google, Microsoft and Amazon.com. Analysts believe Alibaba will be in for one hard ride.

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Microsoft, Google and Amazon recently cut prices on their cloud services to sustain double-digit growth in a public cloud services market that could grow to a US$100 billion industry by 2017, according to research firm, IDC.

The new data center will initially cater to Chinese retail, Internet and gaming firms operating in the U.S. It will later go after U.S. firms seeking a presence in both countries, said Ethan Yu, a vice president at Alibaba who runs the international cloud business, to Reuters.

"This is a very strategic move for us," Yu said. "International expansion is actually a company strategy in the coming few years."

"Eventually we may expand to other regions, for example the East Coast or middle part of the U.S., if our customers have the demand for that."

Aliyun or Alibaba Cloud Computing, Alibaba's cloud unit, began as part of Alibaba's in-house technical infrastructure but now leases processing and storage space to small and medium Internet businesses in China.

It holds a 23 percent market share in China and accounts for about one percent of Alibaba's total revenue. Cloud computing and infrastructure was Alibaba's fastest-growing business segment in the fourth quarter of 2014, with sales jumping 85 percent to US$58 million.

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