<div id="readability-page-1"><div><div>Alibaba Group Holding Ltd BABA BABAF has just raised the stakes in the U.S.–China tech rivalry. The Chinese e-commerce and cloud giant has unveiled a new AI chip designed to reduce reliance on Nvidia, Washington's favorite export-turned-bargaining chip.Once one of NVIDIA Corp's NVDA biggest customers, Alibaba is now rolling out silicon of its own to keep China's artificial intelligence engines humming, a move that highlights Beijing's determination to counter U.S. restrictions with homegrown technology.Track BABA stock here.Read Also: Nvidia Is Now Worth Twice Tesla, AMD, Palantir, And Intel Combined<h2>Beijing's AI Arsenal Gets A New Flag-Bearer</h2>Alibaba's new processor, still in testing, is engineered for AI inference—the stage where trained models generate outputs like chat responses or image recognition, reported Wall Street Journal. Unlike its earlier chips built for narrow tasks, the new design is versatile and, crucially, compatible with Nvidia's software ecosystem. That means Chinese engineers can port existing programs without rewriting them from scratch.The chip's debut comes as U.S. export rules bite: Nvidia's H20, the most powerful AI processor Washington still allows into China, has been hamstrung by political whiplash. President Donald Trump permitted shipments in July, but Beijing swiftly discouraged purchases over &#34;security risks.&#34;Enter Alibaba, MetaX, Cambricon and Huawei — Chinese companies racing to fill the gap. MetaX's upcoming chip boasts larger memory than the H20, Cambricon just posted a blockbuster $247 million quarter and Huawei is pushing monster clusters of 384 Ascend chips, claiming performance that on some metrics rivals Nvidia's Blackwell.<h2>Cloud + AI: Alibaba's $53 Billion Bet</h2>Alibaba's chip push isn't just about politics — it's about money. Cloud computing, its second growth engine alongside e-commerce, saw revenue jump 26% in the April–June quarter thanks to surging AI demand. To seize the moment, CEO Eddie Wu has pledged at least $53 billion in cloud and AI investment over the next three years.The chip also reflects a deeper bottleneck: China can't yet mass-produce cutting-edge semiconductors due to U.S. tech bans. Instead, firms like MetaX are improvising — stitching two smaller chips together to mimic advanced performance.Beijing, meanwhile, is pouring billions into AI self-sufficiency, signaling that Washington's chokehold may not last forever.<ul> <li>Nvidia’s AI Fortress Shows ‘First Crack’—The China Risk Just Got Real</li> </ul>Photo: Shutterstock</div></div></div>

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Alibaba has launched a new AI chip to reduce reliance on Nvidia, highlighting the ongoing U.S.-China tech rivalry. This versatile chip, compatible with Nvidia's software, aims to support China's AI development amid U.S. export restrictions. Alibaba's investment in cloud and AI is set to exceed $53 billion over three years, as the company seeks to fill the tech gap left by U.S. sanctions. Other Chinese firms like MetaX and Huawei are also racing to innovate in the semiconductor space, signaling a shift towards self-sufficiency in technology.

- Alibaba Group has introduced a new AI chip to reduce dependence on Nvidia amid U.S.–China tech tensions.  
- The chip, designed for AI inference, is compatible with Nvidia's software, allowing Chinese engineers to adapt existing programs easily.  
- This move is part of Alibaba's broader strategy to invest $53 billion in cloud and AI, driven by rising demand and the need for technological self-sufficiency in China.  

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China Doesn't Need Nvidia Anymore: Alibaba's New Chip Is A Challenge To Washington