Alibaba launches data center with 10,000 of its own chips as China ramps up AI push

In a significant move to bolster its artificial intelligence capabilities, Alibaba, alongside China Telecom, has launched a new data center in southern China. This facility is notably powered by 10,000 of Alibaba's own Zhenwu semiconductors, specifically designed for AI training and inferencing. The announcement, made on Tuesday, highlights the growing emphasis on domestic AI infrastructure as China seeks to enhance its self-sufficiency in technology. The Zhenwu chips are engineered to support AI models that can handle hundreds of billions of parameters—some of the most extensive models currently in use. This development comes as major Chinese tech firms, including Alibaba, accelerate their efforts to innovate in semiconductor technology, particularly in light of restrictions imposed by the U.S. on China's access to advanced chip technology. In recent years, these restrictions have prompted China to focus on creating its own alternatives to U.S.-made AI chips, such as those from Nvidia. Alibaba is not only a leader in e-commerce but also a major player in cloud computing, having developed its proprietary chips through its T-head unit. The company has been rapidly expanding its data center capabilities and AI model development, which have become key components of its business growth in recent quarters. The new data center, strategically located in Shaoguan, Guangdong province, is expected to grow to accommodate up to 100,000 chips. This computing cluster is versatile and can be applied across various sectors, including healthcare and advanced materials. Last month, a similar initiative was launched with Huawei’s Ascend 910C AI chips, reflecting a broader trend in China towards building large-scale data centers using domestic technology. While U.S. tech giants are projected to invest around $700 billion this year in AI advancements, Chinese companies are adopting a different strategy. They are focusing their investments on specific industries that promise significant revenue growth, rather than pursuing expansive spending.