This article first appeared on GuruFocus.
Sep 12 – Shares of Alibaba Group (NYSE:BABA) climbed more than 5% and Baidu Inc. (NASDAQ:BIDU) jumped 8% in Hong Kong trading after media reports said both Chinese tech firms are advancing efforts to use in-house semiconductors for artificial intelligence training, according to a Friday press release.
Alibaba has begun deploying internally developed processors in smaller AI models earlier this year, while Baidu is trialing its Kunlun P800 chip for training the latest versions of its Ernie model, the report said. The companies’ strategy signals a growing move away from heavy reliance on Nvidia (NASDAQ:NVDA) hardware, long considered essential for complex AI workloads.
The shift follows tighter U.S. export restrictions on advanced chips to China, which have complicated access to high-end graphics processors. Chinese regulators also recently required firms to provide justification for purchasing Nvidia’s H20 chips in certain government and security projects, citing concerns about potential vulnerabilities. Nvidia has denied such claims.
Broader optimism for AI-linked equities supported the rally. Earlier in the week, Oracle Corp. (ORCL) disclosed multi-billion-dollar contracts with artificial intelligence developers, including what was described as a $300 billion computing deal with OpenAI.