BABA Stock Slips Premarket: Alibaba Unveils AI Chips ‘3x More Powerful’ Amid Nvidia’s China Export Battle

• The company said that it has already delivered 560,000 chips to over 400 customers across 20 industries in China. 
• Alibaba has also unveiled preview versions of its next-generation Qwen AI models as it pushes more aggressively into advanced agentic shopping.
• The announcement comes ahead of Nvidia’s Q1 results expected on Wednesday, even as the American chipmaker battles export restrictions to China.

Shares of Alibaba Group Holding Ltd. (BABA) fell 0.6% in Wednesday’s premarket session even as the company reportedly announced a new artificial intelligence chip to rival offerings from Nvidia Corp. (NVDA).

According to a CNBC report, the Chinese firm’s new Zhenwu M890 chips are set to be three times more powerful than its predecessor, with 144 GB of GPU memory and interchip bandwidth of 800 GB per second.

Alibaba said that it has already delivered 560,000 chips to over 400 customers across 20 industries. The announcement comes shortly ahead of American chip giant Nvidia’s first-quarter (Q1) results, expected on Wednesday.

The China Advantage

The latest Zhenwu chips, which Alibaba says are "exceptionally" suited for complex agentic AI workloads, are designed to position the company and its chip T-Head more competitively in China’s AI market.

China has pushed back against U.S. export curbs by restricting imports of advanced American chips, including those from Nvidia. While Washington has allowed exports of certain AI chips, such as Nvidia’s H200, to China, the company’s most advanced Blackwell chips are still banned from the market.

Before the U.S. export restrictions and China’s retaliation, the country was a massive opportunity for Nvidia, accounting for up to 26% of its revenue. However, Nvidia CEO Jensen Huang recently expressed optimism that the Chinese government will eventually reopen its market to U.S. suppliers.

Meanwhile, Alibaba has also unveiled preview versions of its next-generation Qwen AI models, as it pushes into advanced agentic shopping. According to benchmark platform LM Arena, the models currently rank among the top Chinese AI systems in text and vision capabilities, outperforming domestic rivals, though they still trail leading U.S. models from OpenAI, Anthropic, and Google.

Retail Stance On BABA

On Stocktwits, retail sentiment around BABA shares declined from ‘bullish’ to ‘neutral’ territory amid ‘high’ message volumes.

One bullish user compared the company with Nvidia, saying, “$BABA market cap is 320B $NVDA is 6T.    better to beat in baba any day at these levels.  nvda can get to 10T ansd you double your money.  baba can get to 2T and you make 7x.”

BABA shares have gained nearly 9% in the last one year, while NVDA shares have soared more than 64% in the same time.

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