Alibaba Secures Key AI Chip Customer in China Unicom
Shares of Alibaba surged by more than 5% in Hong Kong trading on Wednesday following reports from Chinese state media that the e-commerce and cloud computing giant has landed a significant client for its artificial intelligence (AI) chips. China Unicom, the nation’s second-largest telecommunications provider, will deploy AI accelerators developed by Alibaba’s semiconductor division, Pingtouge, also known as T-Head.
Alibaba’s AI Chips Power New Data Center
According to a report by China Central Television (CCTV), China Unicom plans to incorporate Alibaba’s AI chip technology into its new Sanjiangyuan data center located in Qinghai province. This project will also feature chips from other domestic semiconductor firms, including MetaX and Biren Technology. A source familiar with the matter confirmed the report’s accuracy to CNBC.
Alibaba does not sell these chips directly; instead, companies access the computational capabilities provided by these semiconductors through Alibaba’s cloud services platform.
Strategic Shift Toward Domestic Semiconductor Adoption
This collaboration highlights China’s strategic emphasis on utilizing homegrown semiconductor technologies for AI applications amid ongoing uncertainties surrounding access to foreign AI chipmakers, particularly Nvidia. On the same day, the Financial Times reported that China’s Cyberspace Administration instructed companies to cease purchasing certain Nvidia AI chips, contributing to a roughly 1% decline in Nvidia’s premarket share pricing.
Alibaba’s Growing AI Footprint
Alibaba is a leading AI player in China, having developed proprietary AI models and maintaining a dominant position in cloud computing services. CNBC reported last month that Alibaba is also developing a new generation of AI chips, although it remains unclear if China Unicom’s deployment involves these latest iterations.
The details of the partnership surfaced after CCTV broadcasted a billboard referencing the collaboration during a segment on China Unicom’s data center expansion.
Alibaba did not immediately respond to CNBC’s request for comment.
FinOracleAI — Market View
Alibaba’s announcement of China Unicom as a major customer for its AI chips is a positive development, reinforcing Alibaba’s position in the domestic AI semiconductor market. This partnership advances China’s broader strategy to reduce reliance on foreign AI chipmakers amid geopolitical tensions and regulatory restrictions. However, the extent to which this deal will drive significant revenue growth depends on the scale of deployment and adoption of Alibaba’s latest chip technologies.
Investors should monitor further announcements regarding the specific chips used and potential expansion of similar partnerships. Additionally, regulatory shifts affecting foreign chip access remain a key risk factor impacting the competitive landscape.
Impact: positive
