This article first appeared on GuruFocus.
Alibaba (NYSE:BABA) is stepping deeper into the AI chip race, rolling out a new processor that’s more versatile than its older designs, the Wall Street Journal reported.
The chip is built for AI inference letting trained models analyze new data and unlike most homegrown rivals, it works with Nvidia’s(NASDAQ:NVDA) platform. That means engineers can reuse programs written for Nvidia hardware, giving Alibaba an edge as Chinese firms scramble to fill the gap left by U.S. export rules.
Nvidia’s H20 chip, the most advanced it can sell into China, has run into fresh headwinds. Washington cleared shipments in July, but Beijing quickly told companies to hold off, citing security worries. That’s left space for alternatives from players like MetaX (NASDAQ:META) and Huawei, though engineers complain many domestic chips still overheat or fail during training runs.
Alibaba’s chip won’t fix China’s weakness in training AI models, but it could help on the inference side where demand is exploding. The company’s Cloud Intelligence Group just posted 26% revenue growth, with AI-related sales rising triple digits for the eighth quarter in a row.
