Nvidia ($NVDA) shares slipped 1.7% after reports that Alibaba ($BABA) has developed a new artificial intelligence chip designed to reduce reliance on U.S. suppliers in China. The move highlights Beijing’s ongoing effort to build a self-sufficient AI supply chain amid U.S. export restrictions.
- Alibaba’s new AI chip is more versatile than earlier models and supports a broader range of inference tasks.
- The company was previously one of Nvidia’s largest Chinese customers but has sought alternatives following U.S. regulatory barriers.
- China remains far from producing chips rivaling Nvidia’s most advanced products, but companies are introducing substitutes for Nvidia’s H20 processor.
- MetaX, a Shanghai-based startup, announced a competing chip in July with larger memory capacity for certain AI tasks.
- Beijing-based Cambricon Technologies posted $247M in Q2 revenue from its Siyuan 590 chip, driving its market cap above $87B.
- Alibaba said Friday that its cloud revenue rose 26% year-over-year, fueled by AI demand, and committed $53B over three years to AI and cloud investments.
Relevant Companies
- $NVDA – Faces competitive pressure in China as domestic firms develop AI chip substitutes.
- $BABA – Expanding AI and cloud investments while developing homegrown chips to replace Nvidia products.
- None found
Editor’s Note: This is a developing story. This article may be updated as more details become available.
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