Alibaba Ramps Up AI Push With New Chip, Model Upgrades — Update

By Tracy Qu

Alibaba has been pushing hard to monetize its artificial-intelligence business. Its latest effort: a new AI chip aimed at rivaling offerings from Nvidia.

The Hangzhou, China-based company said Wednesday that the next generation of its high-end Zhenwu chip series, the M890, is three times more powerful than its predecessor, making it "exceptionally" suited for complex agentic AI workloads that demand extensive working memory.

Alibaba also released an update of its flagship large language model Qwen that is engineered for more advanced agentic coding and complex reasoning.

The announcements, made at a conference in Hangzhou, come in the wake of earnings showing that the tech conglomerate's profitability remains under pressure. Though AI investment has significantly dragged on the group's profitability in recent quarters, management has expressed confidence that the investment will pay off.

While Chinese AI startups including Moonshot AI and MiniMax are also pushing aggressively on the large language model front, tech incumbents like Alibaba and Baidu aim to build an ecosystem around AI from models to chips.

The company said in a recent earnings call that scaling up the deployment of its in-house chips represent "the highest value for money compute power," which will improve margins at its cloud segment.

Alibaba expects AI-related product revenue to become the primary driver of revenue growth for the cloud segment, Chief Executive Eddie Wu said earlier this month.

At the conference, the company said it has delivered 560,000 Zhenwu units to date. These chips are widely used in China.

The new Zhenwu M890 features 144 gigabytes of GPU memory, an upgrade from 96 gigabytes for its predecessor, which enables it to process significantly larger data loads. The previous iteration mainly focused on model inference, while the new one supports both model training and model inference.

Chinese chip makers have sped up chip offerings as Beijing pushes for tech independence. Alibaba was long a major customer for Nvidia, now it and other domestic chip designers are filling the void left after Nvidia ran into regulatory barriers restricting the sale of its most-advanced products in China.

A number of Chinese chip companies, including Biren Technology and MetaX, have listed in mainland China and Hong Kong in recent months.

Write to Tracy Qu at tracy.qu@wsj.com

(END) Dow Jones Newswires

May 20, 2026 02:37 ET (06:37 GMT)