Alibaba Stock Increases Amid China AI Data Center Expansion

TLDR

• Alibaba and China Telecom have inaugurated a 10,000-chip AI data center in Shaoguan, Guangdong, utilizing Alibaba’s proprietary Zhenwu semiconductors.
• This represents the first large-scale deployment of Zhenwu chips in China’s Greater Bay Area, built to train AI models containing hundreds of billions of parameters.
• The facility offers a 30% improvement in training and inference efficiency, with single-card throughput increased by almost tenfold compared to prior systems.
• Alibaba intends to expand the cluster to 100,000 chips, and small businesses can utilize its computing power through China Telecom’s platform.
• This development comes after a comparable 10,000-chip cluster using Huawei’s Ascend 910C processors became operational in Shenzhen last month.

(SeaPRwire) –   Alibaba (BABA) and China Telecom have formally activated a 10,000-chip AI computing cluster located in Shaoguan, Guangdong province. The cluster runs exclusively on Alibaba’s in-house Zhenwu AI semiconductors, which were created by its T-Head chip design division.

Alibaba Group Holding Limited, BABA

This announcement signifies the inaugural deployment of Zhenwu chips on this magnitude within the Greater Bay Area. Alibaba Cloud characterized the initiative as advancing China’s AI computing “from achieving high-end performance breakthroughs to implementing it on a large industrial scale.”

ALIBABA LAUNCHES DATA CENTER WITH 10,000 OF ITS OWN CHIPS AS CHINA RAMPS UP AI PUSH

— First Squawk (@FirstSquawk) April 8, 2026

The cluster employs an advanced high-performance networking design that enables all 10,000 chips to function as one unified supercomputer. According to Alibaba, this configuration provides 30% greater efficiency for both training and inference tasks, while the throughput per card is nearly ten times that of older generations.

This system is capable of training models with parameter counts in the hundreds of billions, placing it in the league of the world’s largest AI models currently in development.

The latency is measured at 4 microseconds, a result Alibaba credits to the network architecture connecting the chips. This metric is crucial for enterprise AI applications where speed of response is important.

China’s Push for Domestic AI Infrastructure

The launch aligns with a wider national initiative. Beijing incorporated intelligent computing infrastructure into its 15th five-year plan recently, and an AI action plan issued by the State Council in August advocated for a strategic expansion of computing resources nationwide.

Data from the China Academy of Information and Communications Technology indicates that by the end of June last year, the nation’s total computing power reached 962,000 petaflops, accounting for 21% of global capacity and marking a 73% increase from the previous year.

The Shaoguan cluster is already being used in healthcare and advanced manufacturing sectors. Small and medium-sized enterprises can purchase computing time on China Telecom’s platform, with options to pay per card or per hour.

Alibaba has also verified its strategy to grow the cluster from 10,000 to 100,000 chips. This planned enlargement targets cost reduction and enhanced overall resource efficiency.

Context: Huawei and the Domestic Chip Race

This event comes on the heels of a similar achievement last month, when the country’s first 10,000-card intelligent computing cluster—constructed with Huawei’s Ascend 910C chips—commenced operations in Shenzhen.

That cluster provides 11,000 petaflops of computing capacity and has been integrated with another 3,000-petaflop cluster launched in 2024. Shanghai is also developing a 10,000-card cluster via a subsidiary of the state-owned INESA, which supports multiple types of domestic chips.

Although Chinese chips still lag behind Nvidia in terms of individual chip performance, the strategy from Beijing focuses on leveraging large-scale cluster designs and efficient networking to narrow the performance difference.

Export controls imposed by the U.S. on Nvidia chips have hastened the timeline for China’s domestic chip development. Alibaba’s T-Head unit has been a key player in this effort, along with Huawei.

BABA shares closed up 7.79% on the announcement day, with after-hours trading adding another 0.82% gain for its Hong Kong-listed stock (728-HK).