Alibaba lands major Chinese customer for its AI chip

BEIJING - Alibaba Group Holding has secured a high-profile customer in China Unicom for its artificial intelligence chips, suggesting the Chinese e-commerce leader’s nascent semiconductor efforts are gaining traction in its home market.

Alibaba has signed a contract with the country’s No. 2 wireless carrier to deploy AI accelerators from its semiconductor unit Pingtouge, or “T-Head”, according to a video posted on Sept 16 by state broadcaster CCTV.

The chips will go into China Unicom’s big new data centre in north-western China, alongside accelerators provided by rivals MetaX and Biren Technology.

Alibaba’s shares rallied 5.3 per cent on Sept 17 to their highest level since 2021, joining a broad Chinese tech stock rally as investors piled into major AI-related names.

Alibaba’s chip endeavour mirrors projects under way at major Chinese tech firms, which are exploring their own AI silicon as most advanced Nvidia chips are banned from the country.

Nvidia’s AI accelerators are considered the gold standard in training cutting-edge models from OpenAI and Anthropic.

In August, Baidu said it had won a one billion yuan (S$180 million) contract to provide China Mobile, Unicom’s larger rival, with servers powered by its Kunlun chips.

It is unclear to what extent Unicom is deploying Alibaba chips.

But the report suggests growing adoption of products emerging from T-Head, designed to compete with Huawei Technologies’ Ascend series AI chips and Cambricon Technologies.

Alibaba, which is setting aside some 380 billion yuan over three years on AI infrastructure, is considered a newer entrant to the field, but is investing in the technology in part to wean itself off a reliance on Nvidia’s designs. 

The tech giant is staging a comeback in the post-DeepSeek era, joining a nationwide race to develop AI and the infrastructure that supports it.

The growing hype around T-Head and chip innovation coincides with the increasing involvement of co-founder Jack Ma in 2025 in many aspects of the business. 

Goldman Sachs this week raised its price target and estimates for the company’s cloud business – a bright spot in its most-recent quarterly results.

Alibaba just released an open-source Tongyi Deep Research model – part of a panoply of AI platforms that the company has trotted out in past months to compete globally with OpenAI and DeepSeek.

Unicom revealed in a separate presentation that Alibaba’s AI chip sported superior hardware specifications to Huawei’s Ascend 910B, including more advanced memory, according to CCTV.

Still, Huawei is now moving to market the more powerful 910C.

The Wall Street Journal reported in August that Alibaba has created its own AI chip, capable of operating AI services like DeepSeek’s R1 and its own Qwen models.

CCTV’s clip also showed racks of servers sporting Alibaba Cloud’s logo, as well as those of Unicom and the Chinese Academy of Sciences, the nation’s premier government-run research organisation. BLOOMBERG