We examine the rise of cloud computing and AI in China and their impacts on industry dynamics after the shock to the cost of Internet-based computing power and services. We find that cloud computing is associated with an increase in firm entry, exit and the likelihood of M&A in industries that...

We examine the rise of cloud computing and AI in China and its impact on industry dynamics. We find that industries that depend more on cloud infrastructure experience a higher increase in firm entry and exit after cloud computing expands in China. The positive relation with firm exit is driven...