Chinese e-commerce company Alibaba announced that it’s partnering with Nvidia to fuel its data center expansion across the globe and the introduction of new AI products. Reuters reports that the company is now prioritizing artificial intelligence as part of its core business, which will put it on par with the company’s online retail and wholesale business that made it the tech giant it is today. The announcement seems to imply a direct contravention of Beijing’s directive that bans its biggest tech companies from acquiring Nvidia chips, so it’s unclear if this partnership includes the purchase of AI GPUs.
According to Alibaba Cloud, the company’s Platform for AI (PAI) will integrate the “full suite of the Nvidia Physical AI software stack," so it technically may not violate the order to buy homegrown AI processors. The company already reportedly has its AI chip that competes with Nvidia’s own H20, and it has even created its own High Performance Network using Ethernet to replace Nvidia's interconnect technology.
However, it seems that Alibaba is ready to work with Nvidia to create a cloud-based system design to advance AI capabilities in real-world applications. “The speed of AI industry development has far exceeded our expectations, and the industry’s demand for AI infrastructure has also far exceeded our expectations,” said Alibaba CEO Eddie Wu during the annual Aspara Conference.
Alibaba also unveiled plans to build data centers in Brazil, France, and the Netherlands in the coming year. It will also add more of the same in Mexico, South Korea, Japan, Malaysia, and Dubai — also in the coming year. Alibaba Cloud Intelligence Group SVP Dr. Feifei Li remarked that “AI is revolutionizing not only technology, but also the very foundation of how enterprises deliver business value and drive growth. Our strategic expansion of global infrastructure is designed to cater for the accelerating demand from forward-thinking customers.” But despite all these plans, the company did not mention whether it will use Nvidia’s AI chips for these projects.
This move to increase Alibaba’s footprint abroad will help the company influence the development of AI technology across the globe. It might even be the start of what Jensen Huang has been warning about — that the limitation of the sales of Nvidia chips will allow its competitors to gain a foothold in the international market and reduce the U.S.’s competitive advantage. Of course, its software partnership with Alibaba helps ensure that Nvidia is still involved with this massive project — unless Washington, D.C. or Beijing steps in as part of their chip rivalry and stops the deal from moving forward.
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