Chinese Tech Giants Alibaba and Baidu Make Strides in AI Chip Development

Alibaba, Baidu begin using own chips to train AI models, The Information reports

Sept 11 (Reuters) - China's Alibaba (9988.HK), opens new tab and Baidu (9888.HK), opens new tab have started using internally designed chips to train their AI models, partly replacing those made by Nvidia (NVDA.O), opens new tab, The Information reported on Thursday, citing four people with direct knowledge of the matter. Alibaba has been using own chips for smaller AI models since early this year, while Baidu is experimenting with training new versions of its Ernie AI model using its Kunlun P800 chip, the report said. Alibaba and Baidu did not immediately respond to Reuters requests for comment. The move is a significant shift in China's tech and AI landscape, where companies largely rely on Nvidia's powerful processors for AI development. Increasing U.S. export restrictions on supply of advanced AI chips to China have led Chinese companies to ramp up their own arsenal of AI chips, with growing pressure from Beijing on companies to use home-grown technology. Neither Alibaba nor Baidu has fully abandoned Nvidia, the report said, with both companies using Nvidia chips to develop their most cutting-edge models. While Nvidia's H20 chip - the most powerful AI processor it is allowed to sell in China - does not have as much computing power as H100 or Blackwell series, it still outpaced Chinese alternatives in performance. However, Alibaba's AI chip, the Zhenwu perse processing unit, is now good enough to compete with Nvidia's H20, The Information said in its report, citing three employees who have used the chip. The shift to home-grown chips in China would further dent Nvidia's China business. The company has already struck a deal with President Donald Trump for export licenses in exchange for 15% of China sales of its H20 AI chips. Late last month, CEO Jensen Huang said discussions with the White House to allow the company to sell a less advanced version of its next-generation chip to China will take time. Reporting by Deborah Sophia in Bengaluru; Editing by Tasim Zahid and Arun Koyyur Our Standards: The Thomson Reuters Trust Principles., opens new tab

Alibaba's AI Chip Reportedly Competes With NVIDIA's H20 & Is Already Being Used To Train AI Models; Competition in China is Growing For Team Green

Chinese Big Tech giants seem to be pushing towards adopting domestic computing solutions, as Alibaba's self-built Zhenwu chip is now claimed to feature H20 level performance. There has been a push towards pivoting away from the Western AI tech stack in China, part of which involves AI firms like Huawei, Alibaba, and Baidu developing their own custom solutions, specific to inference or training workloads. While the specific details about these chips aren't certain, a report by The Information claims that both Alibaba and Baidu have started to utilize in-house AI chips for model training. In particular, Alibaba's Zhenwu chip is said to feature performance similar to NVIDIA's H20 AI chip, which is a huge achievement for the Chinese tech giant. But Alibaba's AI chip, for instance, is now good enough to compete with Nvidia's H20 chip, the scaled-down chip designed for the Chinese market, according to three employees who have used Alibaba's Zhenwu chip. - The Information Relative to NVIDIA's solutions in general, Chinese firms are way behind, not just in terms of technological innovations, but also in production capacity. However, when you factor in China's push towards in-house solutions and how far the nation has come in a span of a few years, the Alibaba chip is indeed a massive feat for them. Not just Alibaba, but Baidu has also employed the Kunlun P800 chip for model training and inference workloads, which shows that NVIDIA's tech stack for Chinese customers is facing massive competition. For now, NVIDIA is facing troubles when it comes to accessing China's AI market. Beijing has placed the hurdles, which shows that the firm is in a tough spot right now. It is rumored that NVIDIA is pushing towards introducing a 'Blackwell-based' solution for the domestic markets, called the B40 AI chip, but for now, the plans aren't official, and it will likely require Jensen convincing the Trump administration to allow them to sell high-end solutions to China.