Alibaba Group Holding Ltd. (NYSE: BABA) announced on Wednesday that it will develop its own artificial intelligence chips for cloud computing, internet-connected devices, and other sectors. The Company said it will set up a dedicated chip subsidiary and aims to launch in the second half of 2019.
Alibaba’s Chief Technology Officer, Jeff Zhang, said the e-commerce Company’s advantages in algorithms and data put it in “a unique position to lead real technology breakthroughs in disruptive areas, such as quantum and chip technology.”
Alibaba’s aggressive drive to develop its own semiconductors comes as China’s government looks to raise the quality of home-made chips to help propel high-tech domestic industries from cutting-edge transport to AI healthcare systems.
Alibaba has previously made several investments in chipmakers. Earlier this year, it bought C-Sky, a Chinese chip design firm. Alibaba Executive Chairman Jack Ma has been vocal about addressing China’s heavy reliance on foreign-made chips.
“The market for chips is controlled by America … and suddenly if they stop selling, what that means, you understand,” Ma told university students in Tokyo in April. “That’s why China, Japan and any country — you need core technologies.”
Ma’s remarks came shortly after the US Commerce Department blocked American companies from selling parts to ZTE, a Chinese tech company that relied on U.S. suppliers, including chipmakers, to manufacture smartphones and telecommunications equipment. The ban — since lifted with strict conditions — brought ZTE to its knees and highlighted the risks of China’s dependence on foreign-made technology.