Alibaba is stepping into Nvidia’s gap in China with a new (artificial intelligence) AI chip as NVDA shares drop despite record-breaking sales.
The e-commerce giant has unveiled a processor built for a broader range of inference tasks, aimed at customers blocked from accessing Nvidia hardware, the Wall Street Journal reports.
The chip is being manufactured by a Chinese foundry rather than Taiwan Semiconductor Manufacturing, a shift that underscores Beijing’s goal of technology self-reliance.
People familiar with the matter say Alibaba’s new chip is designed to handle a wide array of AI inference tasks, but notes that the tech is still in its testing phase.
Earlier this month, Nvidia ran into regulatory headaches after pausing production for its H20 AI chip, designed specifically for the Chinese market. China previously instructed local firms not to purchase it, citing security concerns. The H20 had initially won US approval under a deal that required Nvidia to allocate 15% of sales revenue to the U.S. government.
Beijing’s move came despite the chip’s conditional US clearance. In response, Nvidia directed partners, including TSMC, Foxconn, and other suppliers, to halt H20 production.
NVDA is down 3.32% on the day, closing the day at $174 and following news of Alibaba’s new AI chip. The stock is also in the red for this trading week despite posting a historic $46.7 billion quarter.
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