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Alibaba Boosts Its Cloud Business With The Release Of A New Server Chip

Chinese eCommerce giant, Alibaba Group Holdings Ltd, launched a new server chip this Tuesday. In turn, it will boost its cloud computing business and better compete with rivals, such as Amazon and Microsoft.

Alibaba Cloud logo

In terms of market share, Alibaba is the largest cloud computing provider in China and the third-largest globally. With its latest release, the provider will further boost its market position.

Alibaba’s rivals have already released server chips of their own. For instance, Huawei Technologies relies on Kunpeng, while Amazon uses Graviton chips to power its cloud computing infrastructure.

The Chinese government has urged the industry to invest in the domestic chip sector since the country falls behind the global competition. They still rely heavily on overseas companies for much of their advanced semiconductors. In turn, they are especially vulnerable to foreign actions, such as the US sanction against Huawei.

Now, Alibaba will design its chip but not manufacture it, following the trend of many Chinese companies, such as Huawei and Baidu, and US cloud computing rivals, including Google and Amazon.

Jeff Zhang, who serves the role of a president of Alibaba Cloud Intelligence, had this to say:

Customizing our own server chips is consistent with our ongoing efforts toward boosting our computing capabilities with better performance and improved energy efficiency.

Apart from Alibaba, many Chinese automotive, appliance companies, search giant Baidu Inc and phone maker Xiaomi Corp have begun investing in chips.

Alibaba’s in-house semiconductor unit, T-Head, developed the processor. It goes by the name Yitian 710. Furthermore, the chip is based on architecture from UK-based Arm Ltd.

Customers will not get direct access to this product. Instead, Alibaba will incorporate Yitian 710 into new servers called Panjiu. These servers are designed for artificial intelligence applications and storage. Thus, Alibaba customers will get services based on this latest technology.

Alibaba has not yet announced if or when it will release the services based on the latest chip and server for commercial use.