Alibaba Group is significantly expanding its artificial intelligence ambitions with a new processor, a much larger foundation model and a major increase in data-center capacity, according to Reuters.
The Chinese technology company introduced the Zhenwu V900, a next-generation AI chip developed by its T-Head semiconductor unit. Alibaba said the processor delivers approximately three times the performance of its predecessor and can be connected in large clusters capable of running increasingly complex AI workloads.
Mass production of the chip is expected to begin in early 2027.
Alibaba is also developing a foundation model containing approximately 5 trillion to 10 trillion parameters. That would make the system as much as four times larger than the company’s existing Qwen 3.8 Max flagship model.
Larger models can potentially handle more sophisticated reasoning, planning and long-duration tasks, although they also require substantially more computing capacity, electricity and capital.
To support those requirements, Alibaba plans to expand Alibaba Cloud’s data-center capacity to more than 20 gigawatts by 2032. The company is attempting to control the full technology stack needed for AI, including chips, models, cloud infrastructure and applications.
The strategy is particularly important as U.S. export controls limit Chinese companies’ access to Nvidia’s most advanced processors. Developing competitive domestic chips could reduce Alibaba’s dependence on foreign technology while giving its cloud customers greater access to AI computing resources.
Alibaba shares increased 5.1% following the announcements.
The initiative positions Alibaba as one of China’s most comprehensive AI competitors. However, its ability to manufacture the new chips at scale and convert massive infrastructure spending into sustainable revenue will determine whether the strategy can challenge leading U.S. AI platforms.
