BABA Stock At Near Two-Month Highs — Kimi AI's Moonshot Reportedly Has A Power Agreement With Alibaba For 20K Nvidia Chips

• Beijing-based Moonshot AI utilizes a computing agreement with Alibaba involving around 20,000 Nvidia Corp. chips to train and power its Kimi AI models. 
• While sources cited by Bloomberg indicate the cluster relies on high-end Hopper-generation H200 processors, Alibaba explicitly disputed that specific chip model.
• The arrangement comes as U.S. officials allege Moonshot also accessed restricted Blackwell-series chips through Southeast Asian rental channels to narrow the gap with American AI firms. 

Chinese artificial intelligence startup Moonshot AI is powering its flagship models using a compute agreement with Alibaba Group Holding Ltd. that grants access to a cluster of around 20,000 Nvidia Corp. processors.

The substantial computing package underpins Moonshot’s Kimi AI models, including the recently unveiled Kimi K3, Bloomberg reported, citing people familiar with the matter. 

The open-source model made waves across the tech industry earlier this month by rivaling top-tier offerings from Western pioneers like OpenAI and Anthropic on key benchmark metrics.

The arrangement highlights how top Chinese tech contenders remain deeply dependent on advanced Western semiconductors to fuel their artificial intelligence development, even as trade tensions and export controls between Washington and Beijing continue to intensify.

BABA stock gained 5% on Friday and was set to end the week at a near two-month high. 

Internal Rivalry And Compute Disagreements

Alibaba, one of Moonshot’s primary financial backers, routinely expects its portfolio companies to utilize its cloud infrastructure, Bloomberg reported. However, the alliance has created internal friction.

Using Alibaba’s own cloud framework, Moonshot’s Kimi models have outperformed Alibaba’s in-house Qwen AI products on several performance benchmarks. According to sources familiar with internal discussions at Alibaba, Kimi’s superior performance has caused disappointment among some staff members who noted that both development teams had access to comparable training resources.

Questions also remain regarding the precise specifications of the Nvidia hardware powering the deal. The cluster consists of Nvidia’s Hopper-generation H200 processors—the most capable units in that product family.

Alibaba strongly rejected that detail. "The alleged supply of H200 chips to Moonshot from us is completely groundless," an Alibaba spokesperson told Bloomberg. The cloud giant did not deny providing 20,000 Nvidia processors to Moonshot, nor did it clarify which specific chip models make up the cluster.

Circumventing US Sanctions

The reveal of Moonshot’s computing setup arrives amid heightened scrutiny from U.S. regulators regarding how Chinese firms obtain advanced hardware. The U.S. government has long placed strict export limits on Nvidia’s most capable AI accelerators, requiring explicit permits to ship high-end processors to China.

A person familiar with Moonshot’s procurement operations confirmed to Bloomberg that the startup maintains a pipeline to access Blackwell processors through Southeast Asia, though it remains unclear whether the arrangement involves legal cloud renting or unauthorized direct purchases.

Both Moonshot and Nvidia declined to comment on the arrangement, according to Bloomberg.

BABA Stock: Retail View 

Retail sentiment on Stocktwits was ‘bullish’ with ‘normal’ message volumes. Retail chatter on the stock jumped about 80% from the previous session. 

BABA stock has lost about 17% year-to-date, while the Global X artificial intelligence and technology ETF (AIQ) has gained 15%. 

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