Alibaba Group shares climbed on Wednesday after Chinese state media reported the company had landed a significant customer for its artificial intelligence chips.
Alibaba’s stock closed more than 5% higher in Hong Kong Exchange, while its U.S.-listed shares rose over 2% in premarket trading.
China Unicom has launched a major data center in Xining, the capital of Qinghai province, powered by domestically developed artificial intelligence chips supplied by Alibaba and other Chinese firms, according to state broadcaster CCTV. Alibaba’s semiconductor arm, T-Head, was the largest contributor, supplying roughly 72% of the chips.
With rising geopolitical tension, Chinese authorities are urging domestic companies to adopt homegrown chips, warning against the use of products from U.S. giant Nvidia on security grounds.
The Cyberspace Administration of China had directed companies to stop purchasing certain Nvidia AI chips. The move comes amid ongoing tensions between Beijing and Washington over technology exports and access to advanced semiconductors.
Alibaba, a prominent player in China’s AI sector and a leader in cloud computing, has actively developed its own AI models and, according to a recent CNBC report, is working on a new generation of AI chips. However, it remains unclear whether China Unicom is deploying Alibaba’s latest semiconductors in its data center.
