Alibaba Cloud has introduced a new pooling system that reportedly reduces the use of Nvidia GPUs by 82%. This innovative approach aims to optimize cloud resource management and enhance efficiency for users relying on high-performance computing. The initiative reflects Alibaba's efforts to compete in the cloud services market against other major players.

Alibaba is developing a new AI chip aimed at compensating for the supply gap left by Nvidia, which has faced regulatory challenges in China. As Chinese tech companies ramp up efforts to produce their own processors, Alibaba's move comes amid increased demand for cloud computing services and revenue growth in that sector.

Alibaba and Nvidia are expanding their partnership to enhance artificial intelligence capabilities, focusing on cloud computing and data processing. This collaboration aims to leverage Nvidia's advanced AI technologies within Alibaba's cloud services, potentially transforming various sectors in China and beyond.

Alibaba's shares in Hong Kong rose over 19% following strong quarterly results driven by its cloud computing unit and developments in AI chip technology. The company's revenue reached 247.65 billion yuan, with a notable 26% growth in cloud revenue, while its core e-commerce business showed signs of recovery despite investments in competitive instant commerce services.