Alibaba shares rose Tuesday after the Chinese technology giant announced major advances in artificial intelligence, including a new AI chip and its largest AI model. The developments helped lift Alibaba’s American depositary receipts 3.3% in premarket trading. However, the company continues to trail leading US AI players in chip performance and data-center capacity.
Alibaba introduced the Zhenwu V900, which it described as its most powerful AI chip. The company said the new chip delivers three times the performance of its predecessor, which was released just four months ago.
At the same time, Alibaba launched the Qen3.8-Max, which it described as the most powerful of its flagship AI releases so far.
The announcements come after a difficult period for Alibaba shares. Its ADRs had fallen 21% this year before Tuesday’s trading, according to Barron’s.
Alibaba CEO Eddie Wu said the company expects significant growth in annual AI chip shipment volumes. He also pointed to shortages across the global AI data-center supply chain as a constraint on the pace at which Alibaba can expand its computing infrastructure.
Wu said Alibaba would work with partners to address those challenges. Alibaba Cloud is targeting more than 20 gigawatts of global data-center capacity by 2032.
The company sees expansion of computing infrastructure as an important part of its broader AI strategy as demand for AI services continues to grow.
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Despite the latest announcements, Alibaba’s AI infrastructure remains behind leading US companies. Its latest chip is considered competitive with NVIDIA’s Hopper hardware, which is now two generations old.
The gap is also visible in data-center capacity. SpaceX has said it intends to have sufficient power and cooling to support 20 gigawatts of computing capacity by the end of next year.
Counterpoint Research senior analyst Parv Sharma said China’s AI infrastructure is more supply-constrained because AI has become a strategic priority. He noted that Alibaba’s 20-gigawatt target by 2032 needs to be viewed against the scale already operated by US hyperscalers.
Alibaba investors are also watching talks between US President Donald Trump and Chinese President Xi Jinping, particularly for any developments affecting AI technology and access to advanced chips.
Barron’s reported that China’s ability to close the gap with the US could remain constrained unless access to cutting-edge chips improves.