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Alibaba produces its first AI chip

Alibaba AI chip

Alibaba unveiled its first chip to power artificial intelligence (AI) processes. The move could boost its already fast-growing cloud computing business and signals China’s growing ambitions in developing its own homegrown semiconductor industry.

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The chip, called the Hanguang 800, can cut down computing tasks that would have usually taken an hour, down to just five minutes, the e-commerce giant claims.

Alibaba said that the chip is currently being used internally within the company’s business operations, especially in product search and automatic translation on e-commerce sites, personalized recommendations, advertising, and “intelligent customer services.” These are areas that require extensive computing tasks and the chip can help speed things up.

“In the near future, we plan to empower our clients by providing access through our cloud business to the advanced computing that is made possible by the chip, anytime and anywhere,” Jeff Zhang, Alibaba’s chief technology officer, said in a press release.

An Alibaba spokesperson told CNBC that the company has no plans to sell the chip as a standalone product. Instead, the company is planning to use the chip in its cloud computing products.

Employing the chip in its own cloud computing business could allow Alibaba to sell new cloud services to its customers. The cloud business is Alibaba’s fastest-growing division and has been flagged by management as a critical area for the future.

The Chinese e-commerce titan is the biggest cloud player by market share in the mainland, and within the top five in the world.

Still, the company trails market leader Amazon by a long way. Alibaba will be hoping new innovations like its AI chips can help attract more customers.

Alibaba’s move into AI chips follows Huawei which last month unveiled its own AI semiconductor called the Ascend 910, aimed at being used in data centers. Companies using AI applications require huge amounts of data to train smart algorithms, and that can take several days or weeks. Huawei claims its chip is the “world’s most powerful AI processor.”

The launch of AI chips by Alibaba and Huawei — two of China’s largest tech companies — highlights the country’s ambitions to create its own homegrown semiconductor industry. Currently, Chinese companies rely heavily on American technology, but the Washington’s move to blacklist Huawei and restrict its access to American tech has increased China’s focus on chips.

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Beijing highlighted semiconductors as a key area of the “Made in China 2025” plan, a government initiative that aims to boost the production of higher-value products. China aims to produce 40% of the semiconductors it uses by 2020 and 70% by 2025.

(Source: CNBC)