Key Points
- The chip is specifically for inferencing quite than training but Alibaba will still use semiconductors from other vendors like Nvidia.
- Alibaba said it will invest at the least 380 billion Chinese yuan ($53.1 billion) in AI over the following three years.
- Chinese technology firms have focused on developing homegrown chips over the previous few years amid rising geopolitical tensions between the U.S. and China.
Alibaba is developing a brand new chip designed for artificial intelligence applications, two people aware of the matter told CNBC, as Chinese tech firms look to ramp up development of homegrown semiconductors. Alibaba’s semiconductor is designed for inferencing, which is the actual running of AI applications, quite than training which is when huge amounts of information is used to develop a big model, said one source, who wished to stay anonymous on account of the sensitive nature of the matter. The Wall Street Journal first reported the news of the chip, which has not officially been launched. Alibaba declined to comment when contacted by CNBC. Chinese technology firms have focused on developing homegrown chips over the previous few years as rising geopolitical tensions between the U.S. and China has threatened to chop off access to American technology for firms on the planet’s second-largest economy. The most recent example is U.S. firm Nvidia , which earlier this yr was blocked from selling its H20 product to China. The H20 is a system that has reduced performance and was designed specifically to comply with export curbs to China. Nvidia has since been given the green light to resume shipments to China so long as the firm pays 15% of that revenue to the U.S. government . Still, Nvidia said on its earnings call this week that it has not shipped any of the H20 chips to China yet. Alibaba will proceed to make use of its own chips in addition to those from other vendors like Nvidia, one in every of the sources told CNBC. Nvidia’s chips are able to each training and inferencing. Nvidia shares prolonged their recent losses, falling over 3% in early trade within the U.S. Meanwhile, Alibaba shares were up 12% on the chip news in addition to its strong earnings posted on Friday. Unlike Nvidia, Alibaba won’t sell its chip to external customers. As a substitute, customers will rent computing power from Alibaba that’s partly based on these latest chips. Alibaba didn’t reply to a request for comment from CNBC. AI boost The Hanghzou-headquartered company has a semiconductor design unit referred to as T-head. The last inference chip it released was the Hanguang 800 in 2019 . These chips go into servers in data centers to process AI workloads. Alibaba has signaled plans to speculate heavily in AI infrastructure. This yr, the corporate said it will invest at the least 380 billion Chinese yuan ($53.1 billion) next three years. Already, Alibaba is seeing the advantages. On Friday, the corporate said its cloud division saw revenue jump 26% year-on-year , as quarterly growth continues to speed up. AI-related product revenue “maintained triple-digit year-over-year growth for the eighth consecutive quarter,” the corporate said. A few of Alibaba’s rivals including Baidu are also developing their very own semiconductors. While these firms still use Nvidia chips where they will, also they are using alternatives from Chinese firms like Huawei , which has emerged as a key player in China’s AI semiconductor space. Nvidia CEO Jensen Huang has been lobbying the U.S. government to permit American chip firms to sell to China or risk Chinese firms filling the void . Cambricon, one in every of the country’s AI chip designers, this week reported a 4,000% surge in revenue and posted a record profit in the primary half of the yr.
