Prime Highlights:
- Alibaba secured a major deal as China Unicom will use its chips through Alibaba Cloud.
- Shares of Alibaba jumped over 5% in Hong Kong and gained in U.S. premarket trading.
Key Facts:
- The chips come from Alibaba’s semiconductor unit, Pingtouge (T-Head).
- The partnership is part of China Unicom’s new data center project in Qinghai province.
Key Background:
Alibaba has reached a major milestone as China Unicom, the country’s second-largest telecommunications company, will use the company’s chips through Alibaba Cloud, according to state media CCTV. This marks an important win for Alibaba’s semiconductor unit, Pingtouge, also known as T-Head, and shows the rising demand for locally made technology in China.
The deal will see China Unicom leverage Alibaba’s AI accelerators as part of a large new data center project in Qinghai province, known as the Sanjiangyuan data center. This initiative will also incorporate AI chips from other domestic firms, including MetaX and Biren Technology. While Alibaba does not sell chips directly, companies can access the computing power of these semiconductors via Alibaba Cloud services.
Following the announcement, Alibaba’s shares surged, closing more than 5% higher in Hong Kong. In U.S. premarket trading, the company’s stock also showed gains of over 2%, reflecting investor confidence in the e-commerce giant’s expanding AI capabilities.
The partnership comes as China works to increase the use of its own semiconductor technology. According to recent reports, certain imported chips may be limited in importation, and this indicates the tendency of the country to use more local technology.
An already established player in cloud computing, Alibaba has been advancing its own technologies in chips. There is also a rumor that the company is developing a new generation of chips, but it is not yet confirmed whether they will be included in the China Unicom project.
A person familiar with the matter confirmed the CCTV report, although Alibaba did not give an official comment. The deal highlights Alibaba’s growing role in the country’s technology sector and shows rising trust in its cloud and chip capabilities.
With this agreement, Alibaba is set to strengthen its position in cloud services and semiconductors, while also supporting China’s wider efforts to promote local technology in a fast-growing digital landscape.