The design of multiple input multiple output (MIMO) schemes capable of achieving both high spectral and energy efficiency constitutes a challenge for next-generation wireless networks. MIMO schemes based on generalized spatial modulations (GSM) have been widely considered as a powerful technique to achieve that purpose. In this paper, a multi-user (MU) GSM MIMO system is proposed, which relies on the transmission of precoded symbols from a base station to multiple receivers. The precoder’s design is focused on the removal of the interference between users and allows the application of single-user GSM detection at the receivers, which is accomplished using a low-complexity iterative algorithm. Link level and system level simulations of a cloud radio access network (C-RAN) comprising several radio remote units (RRUs) were run in order to evaluate the performance of the proposed solution. Simulation results show that the proposed GSM MU-MIMO approach can exploit efficiently a large number of antennas deployed at the transmitter. Moreover, it can also provide large gains when compared to conventional MU-MIMO schemes with identical spectral efficiencies. In fact, regarding the simulated C-RAN scenario with perfect channel estimation, system level results showed potential gains of up to 155% and 139% in throughput and coverage, respectively, compared to traditional cellular networks. The introduction of imperfect channel estimation reduces the throughput gain to 125%.