Alibaba’s New AI Chip: A Major Leap in China’s Semiconductor Independence
Chinese e-commerce titan, Alibaba, has made a significant stride in China’s quest for semiconductor autonomy by developing a new artificial intelligence chip. This chip, designed for inference tasks, is currently in the testing phase. It is more versatile than Alibaba’s previous processors and can handle a wider range of AI inference applications.
Contrasting with Alibaba’s earlier Hanguang 800 chip from 2019, which relied on Taiwan Semiconductor Manufacturing (TSMC), this new processor is being manufactured by a Chinese company. This reduces dependence on foreign suppliers and is a significant development, especially as U.S. export restrictions continue to limit China’s access to Nvidia’s most advanced chips. This has been particularly pertinent since the H20 chip was effectively blocked earlier this year.
News of the chip development and robust cloud computing results led to a 19% surge in Alibaba’s shares on Monday. The company’s cloud division reported a 26% revenue jump, with AI-related product revenue maintaining triple-digit year-over-year growth for the eighth consecutive quarter. Alibaba has pledged to invest at least 380 billion Chinese yuan ($53.1 billion) in AI infrastructure over the next three years, thereby positioning itself as a key player in China’s domestic semiconductor ecosystem.
Source: CNBC