Alibaba has developed a new AI chip designed to handle a broader range of inference tasks, marking a significant shift toward domestic semiconductor production as the chip is being manufactured entirely in China. This development represents a strategic pivot away from foreign suppliers like Taiwan Semiconductor Manufacturing Company (TSMC), which produced Alibaba’s earlier AI processors, and aligns with Beijing’s broader push for technological self-sufficiency amid ongoing U.S. export restrictions.
What you should know: The new chip is currently undergoing testing and represents Alibaba’s latest effort to reduce dependence on foreign AI semiconductor suppliers.
- Unlike previous generations of Alibaba’s AI processors that were fabricated by TSMC, this new chip is being manufactured domestically in China.
- The processor is specifically designed to handle a wider set of inference tasks, potentially making it more versatile than earlier versions.
In plain English: AI inference chips are specialized processors that help computers make predictions or decisions based on data they’ve already learned from—like how your phone recognizes your face or how streaming services recommend movies. Manufacturing these chips domestically means China can control its own supply chain rather than relying on foreign companies.
The big picture: Chinese technology companies are accelerating domestic chip development as U.S. export controls create supply chain uncertainties and push Beijing toward semiconductor independence.
- The U.S. government blocked sales of Nvidia’s H20 chip earlier this year, despite it being specifically designed to comply with export controls for Chinese customers.
- In August, the Trump administration struck a deal allowing Nvidia to sell H20s in China, provided that 15% of those revenues go to the U.S. government.
- Chinese authorities have discouraged domestic companies from deploying the H20 chip, particularly in government and security-related projects, and instructed major firms like Alibaba, ByteDance, and Tencent to pause H20 purchases during a national security review.
Competitive landscape: Nvidia continues developing China-specific processors while Chinese companies race to create viable alternatives.
- Nvidia is reportedly preparing a new AI chip for the Chinese market called the B30A, which will outperform the H20 model with a single-die design integrating all major components onto one piece of silicon.
- The B30A is expected to provide about half the computing power of Nvidia’s dual-die Blackwell Ultra GPUs.
- China is requiring its data centers to adopt more domestically produced chips, with state-owned computing hubs instructed to ensure over half their chips come from domestic manufacturers.
What they’re saying: Nvidia CEO Jensen Huang remains optimistic about Chinese market opportunities despite ongoing restrictions.
- “The opportunity for us to bring Blackwell to the China market is a real possibility,” Huang said during Nvidia’s latest earnings call.
- “We just have to keep advocating the importance of American tech companies to be able to lead and win the AI race, and help make the American tech stack the global standard.”
- Huang estimated China’s AI market could expand by 50% next year, representing a $50 billion opportunity in 2025.
Recent Stories
DOE fusion roadmap targets 2030s commercial deployment as AI drives $9B investment
The Department of Energy has released a new roadmap targeting commercial-scale fusion power deployment by the mid-2030s, though the plan lacks specific funding commitments and relies on scientific breakthroughs that have eluded researchers for decades. The strategy emphasizes public-private partnerships and positions AI as both a research tool and motivation for developing fusion energy to meet data centers' growing electricity demands. The big picture: The DOE's roadmap aims to "deliver the public infrastructure that supports the fusion private sector scale up in the 2030s," but acknowledges it cannot commit to specific funding levels and remains subject to Congressional appropriations. Why...
Oct 17, 2025Tying it all together: Credo’s purple cables power the $4B AI data center boom
Credo, a Silicon Valley semiconductor company specializing in data center cables and chips, has seen its stock price more than double this year to $143.61, following a 245% surge in 2024. The company's signature purple cables, which cost between $300-$500 each, have become essential infrastructure for AI data centers, positioning Credo to capitalize on the trillion-dollar AI infrastructure expansion as hyperscalers like Amazon, Microsoft, and Elon Musk's xAI rapidly build out massive computing facilities. What you should know: Credo's active electrical cables (AECs) are becoming indispensable for connecting the massive GPU clusters required for AI training and inference. The company...
Oct 17, 2025Vatican launches Latin American AI network for human development
The Vatican hosted a two-day conference bringing together 50 global experts to explore how artificial intelligence can advance peace, social justice, and human development. The event launched the Latin American AI Network for Integral Human Development and established principles for ethical AI governance that prioritize human dignity over technological advancement. What you should know: The Pontifical Academy of Social Sciences, the Vatican's research body for social issues, organized the "Digital Rerum Novarum" conference on October 16-17, combining academic research with practical AI applications. Participants included leading experts from MIT, Microsoft, Columbia University, the UN, and major European institutions. The conference...