Alibaba is trying to boost its cloud business
Chinese e-commerce giant Alibaba has launched a new server chip, as it looks to boost its cloud computing business and compete against US competitors such as Amazon.
It is assumed that there is a slide called Yitian 710 Within the new servers called Panjiu. AndThe chip and servers will not be sold directly to customers.
Instead, the company’s cloud computing customers buy services based on the latest technology. These servers are designed for AI and storage applications.
The company did not say when services based on the latest chip and server would be available to customers. AndAlibaba will not manufacture semiconductors but designs them instead.
This is the trend among Chinese companies. Huawei designs its own smartphone chips and Baidu raised money this year for its standalone semiconductor business.
US cloud computing competitors including Google and Amazon have done the same.
Alibaba sees cloud computing as a key part of its future growth. But it currently represents 8 percent of the company’s total revenue.
The e-commerce giant’s cloud computing business saw slower growth in the June quarter after it lost a major customer that was using its cloud services overseas.
However, Alibaba is the largest cloud computing company in China. But competitors are investing heavily to catch up.
As US sanctions continue to hurt Huawei’s smartphone business, the company is also looking to increase its revenue from the cloud.
Alibaba is trying to expand its cloud business internationally. But it still lags behind the likes of Amazon and Microsoft in terms of global market share.
And companies are investing in their own chips as a way to get custom-designed silicon that can run certain applications as a way to differentiate themselves from the competition.
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The customization of our server chip aligns with our ongoing efforts toward enhancing our computing capabilities with better performance and energy efficiency,” the company said in a press release.
The Yitian 710 chip is based on architecture from British semiconductor company Arm, as well as using some of the latest manufacturing processes.
The Yitian 710 chip does not represent the company’s first attempt to enter the custom-designed semiconductor industry.
In 2019, Alibaba launched its first AI chip called Hanguang 800.
The new server chip comes as China’s internet giants face intense scrutiny from domestic regulators looking to rein in some of their power and tighten rules around areas from antitrust to data collection.
In April, the company was fined $2.8 billion as a result of an antitrust investigation. However, semiconductors is an area in which China hopes to boost its domestic capabilities as the country’s industry still relies heavily on foreign technology.
Read also: Alibaba ignores $2.75 billion antitrust fine
