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's new AI chip is designed to compete directly with NVIDIA’s H200, aiming to capture a share of the growing AI hardware market. The chip boasts advanced capabilities tailored for AI workloads and is positioned to challenge NVIDIA's dominance in the sector. With significant investments in AI technology, Alibaba is poised to leverage its infrastructure to enhance performance and efficiency.