Alibaba, a major Chinese IT company, is set to enter the prototype production phase for its new AI semiconductor in the second half of this year.
CEO Wu Yongming announced during an earnings call on August 20 that Pingtouge, a fabless semiconductor design subsidiary, is expected to begin prototype production of its second-generation Chinese AI chip in the latter half of the year, according to a report by China Securities Journal on August 21. Pingtouge plans to hand over the semiconductor design to a foundry for prototype production, with mass production anticipated to follow.
Wu did not disclose specific product names or detailed specifications for the next-generation chip. He stated that the chip will have "very strong computational power and inter-chip connection bandwidth," adding that Alibaba believes this chip could completely replace large-scale AI model training currently dominated by Nvidia's high-performance AI accelerators.
The 'Zhenwu' series AI chip developed by Pingtouge is already serving over 650 customers as of early August. Additionally, the supernode based on the Zhenwu M890, which was unveiled in May, has recently been commercialized through Alibaba Cloud. The M890 features 144GB of high-bandwidth memory (HBM) and supports an inter-chip connection bandwidth of 800GB/s. Alibaba claims the overall performance of the M890 is three times higher than that of the previous generation Zhenwu 810E.
The next-generation chip mentioned by Wu is a successor to the M890. Pingtouge previously announced in its roadmap that it plans to launch the Zhenwu V900 in the third quarter of 2027, aiming for a performance increase of three times compared to the M890. The V900 is expected to feature 216GB of memory and an inter-chip connection bandwidth of 1200GB/s.
Wu also highlighted that Pingtouge has already established a combination of self-developed chips encompassing GPUs, CPUs, and network chips. This indicates that Alibaba is not just developing AI chips as standalone products but is also building its own computing ecosystem that includes CPU, AI accelerators, and network chips, with annual generational upgrades.
Meanwhile, Alibaba reported a revenue of 268.9 billion yuan for the second quarter of this year, a 9% increase compared to the same period last year. However, net profit fell by 38% year-on-year to 20.7 billion yuan, attributed to investments in AI infrastructure. Capital expenditures for the second quarter rose by 75% year-on-year to 67.6 billion yuan. Earlier, Alibaba announced plans to invest 380 billion yuan (approximately $78 billion) over the next three years.
* This article has been translated by AI.
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