Catenaa, Sunday, September 07, 2025- Alibaba has developed a new AI chip designed to handle a wider range of inference tasks, aiming to reduce reliance on US-made Nvidia processors, the Wall Street Journal reported Friday.
The chip, currently in testing, is produced by a Chinese manufacturer, unlike Alibaba’s earlier AI processors, which were fabricated by Taiwan Semiconductor Manufacturing.
The development comes amid regulatory hurdles that restricted Nvidia’s H20 chip sales in China earlier this year. While U.S. authorities recently permitted Nvidia to resume H20 sales, Chinese firms are accelerating efforts to produce domestic alternatives.
Alibaba is among China’s largest cloud-computing providers and one of Nvidia’s top customers. Analysts noted that producing its own AI processors could allow Alibaba to maintain technological independence while mitigating geopolitical supply risks.
The move also aligns with Beijing’s push for homegrown AI and semiconductor technology, particularly following the 2023 US export restrictions that limited access to Nvidia’s H100 and Blackwell series chips.
The company reported a 26% revenue increase in its cloud computing division for the April-June quarter, surpassing market expectations due to strong demand.
Industry observers said Alibaba’s new chip could support China’s AI expansion, particularly in cloud services, enterprise applications, and other inference-heavy workloads.
Experts emphasized that widespread adoption will depend on performance benchmarks, regulatory approval, and market acceptance, as China seeks to balance domestic innovation with global competitiveness.
