Alibaba’s shares rose sharply after the company secured a major contract for its AI chips, reflecting China’s drive to boost domestic AI technology.
China Unicom, the country’s second-largest telecom provider, will use AI accelerators from Alibaba’s semiconductor unit, Pingtouge (T-Head), according to China’s state broadcaster CCTV.
Alibaba does not sell chips directly but offers access through its cloud services. A source confirmed the report to CNBC. Alibaba did not comment immediately.
Following the news, Alibaba’s shares rose over 5% in Hong Kong and more than 2% in U.S. premarket trading. China Unicom’s new data centre in Qinghai will also include chips from other Chinese firms such as MetaX and Biren Technology, highlighting China’s focus on reducing reliance on foreign suppliers like Nvidia.
This follows a Financial Times report that China’s Cyberspace Administration ordered companies to stop buying certain Nvidia AI chips. Nvidia shares dropped about 1% in premarket trading.
Alibaba is a leading AI player in China, developing AI models and dominating cloud computing. CNBC recently reported it is developing a new AI chip tailored for advanced machine learning.