Alibaba reportedly developing new AI chip as China’s Xi rejects AI’s ‘Cold War mentality’

Chinese e-commerce giant Alibaba is developing a new chip for artificial intelligence (AI), according to several media reports.

The move comes after the United States banned Nvidia from selling its most powerful chips, the Blackwell chip, to China in April, arguing it was necessary to safeguard US national and economic security as the AI global race gains pace. 

The US appeared to reverse course last month after Nvidia agreed to pay the government 15 per cent of what it earns from chip sales to China. While selling the Blackwell chip to China is still up in the air, Nvidia did get the clearance to export its watered-down H20 chip to China. 

Even so, in August China reportedly told its local tech companies to stop buying American company Nvidia’s chips, citing security concerns. 

Here is everything we know so far about Alibaba’s AI chip offering. 

The company is not new to chips, and its last one, the Hanguang 800, was released in 2019. 

Alibaba also has its own semiconductor design unit, called T-head. 

The company said this year it would invest at least 380 billion Chinese yuan (€45 billion) in AI over the next three years.

However, US company Nvidia is the world’s leading AI chip supplier and has the most powerful semiconductors, which it has spent years developing. It will take a while for other companies to catch up with newer offerings. 

Chinese firm Huawei also has its own AI chip; meanwhile, Cambricon is also being hyped as China’s next AI champion. 

Chinese firms such as Alibaba and ByteDance have previously said their AI development would be hindered without Nvidia’s chips. 

For the moment, Alibaba will continue to use its own chips as well as those from companies including Nvidia, a source told CNBC.

The publication also reported that Alibaba’s chip will not be sold to external customers and will instead allow customers to rent “computing power from Alibaba that is partly based on these new chips”.

‘Cold War mentality’

For the moment, there are a lot more unknowns about this new chip. But the reports come as Chinese President Xi Jinping called for AI cooperation, rejecting a “Cold War mentality” over the technology, CNBC reported him as saying on Monday at the Shanghai Cooperation Organization summit.

Meanwhile, Nvidia CEO Jensen Huang said last week that his company is discussing a potential new computer chip designed for China with the Trump administration.

“I’m offering a new product to China for ... AI data centres, the follow-on to H20,” Huang said in Taiwan. But he added that "that’s not our decision to make. It’s up to, of course, the United States government. And we’re in dialogue with them, but it’s too soon to know”.

Huang has also warned the US government that Chinese companies could fill the AI chip void if Nvidia cannot sell to China. 

Experts have also previously warned to Euronews Next that the framing of the geopolitical AI race is wrong and it should be called a “suicide race,” especially when it comes to artificial general intelligence (AGI). The term has many definitions, but it commonly refers to the idea that AI can replace human workers and also develop and build AGI machines themselves.