Alibaba has made 470,000 AI chips, admits they’re inferior • The Register

Chinese language net large Alibaba has revealed its T-Head chipmaking enterprise has shipped 470,000 AI chips, and admitted they’re presently inferior to rival merchandise, however believes it will probably construct a mutually optimized stack that makes efficiency gaps moot.

CEO Yongming Wu revealed the 470,000 determine throughout the firm’s Q3 2026 earnings name, with out specifying the mannequin he referred to. Alibaba has created a number of chips no less than three chips designed for AI workloads, together with the infamously buggy XuanTie C908, the TH1520 for edge AI, and the Pingtouge Zhenwu 810E. The latter debuted in January and is regarded as aggressive with Nvidia’s H20, a throttled model of a 2023-vintage Hopper structure accelerator.

If Wu was referring solely to the 810E, delivering 470,000 since January is spectacular because it places Alibaba’s output on the similar tempo as Nvidia’s: CEO Jensen Huang final 12 months mentioned the corporate shipped six million Blackwell GPUs in a 12 months.

Nonetheless the Zhenwu 810E can not compete with accelerators from Nvidia or AMD, a reality Wu acknowledged.

“Provided that our chips nonetheless lag behind overseas counterparts and efficiency in varied respects, we aspire to have interaction in additional profound co-design with Alibaba’s cloud infrastructure and the Qwen mannequin to supply improved value effectiveness,” the CEO mentioned. “That is one key differentiator and the way we method chip design at T-Head that units us aside from different chip firms. Our major purpose is to create AI capabilities that provide superior worth for cash.”

He additionally mentioned creating its personal chips offers Alibaba “assured provide of AI computing energy,” which he mentioned is critical given “the distinctive circumstances presently dealing with the AI trade in China” – seemingly a reference to US export bans on superior accelerators.

Wu additionally thinks creating its whole stack will imply Alibaba can decrease inferencing prices, and that doing so will imply the corporate’s cloud can rake in loads of income as demand for AI companies will increase.

Alibaba Cloud is already doing properly, rising quarterly income 36 p.c year-over-year to $6.2 billion. The corporate predicted it will probably attain $100 billion of annual cloud and AI income inside 5 years.

Wu additionally commented on hypothesis that Alibaba plans to spin out T-Head, saying the corporate doesn’t rule out a future float however has no “definitive time line” for making it occur.

Alibaba’s income for the quarter landed at $40.7 billion, representing two p.c development. Execs identified that had it not bought some companies, development would have been 9 p.c.

Home e-commerce and logistics companies stay the corporate’s most important companies, collectively accounting for nearly half of income. Worldwide e-commerce companies introduced in $5.6 billion, a six p.c year-over-year enhance.

That’s an unwelcome consequence for Alibaba, given Beijing is seeking to its e-commerce giants to assist it obtain a purpose of accelerating export gross sales.

That leaves Alibaba’s cloud as its solely fast-growing enterprise, and with rather a lot using on its potential to attain the swift surge to from round $25 billion to $100 billion annual income.

CEO Wu thinks that development is achievable as a result of Alibaba Cloud noticed a 6x enhance in token consumption on its mannequin studio platform within the final six months alone.

He thinks that type of development will recur.

“Cloud and software program budgets for enterprise IT companies have historically represented solely round 5 p.c of company income,” he mentioned. “As model-driven brokers start to deal with mainstream work duties throughout industries, our complete addressable market will increase by a number of multiples.” ®