Alibaba and China Telecom have launched a new data center in southern China powered by 10,000 of Alibaba’s self-developed Zhenwu AI semiconductors, designed for both AI training and inferencing and capable of supporting models with “hundreds of billions of parameters.” This facility, owned and operated by China Telecom and located in Shaoguan, Guangdong province, forms part of a broader national effort to build large-scale data centers using domestic technology and reduce reliance on foreign chips. The initiative reflects how Chinese tech companies are accelerating development of local semiconductor solutions in response to U.S. restrictions on access to advanced AI chips from firms like Nvidia, which have “accelerated the country’s efforts to develop domestic alternatives.”
Alibaba has been designing its own chips through its T-head unit while simultaneously expanding its cloud computing operations, one of its fastest-growing businesses in recent quarters. The company integrates chip design, data center construction, and AI model development into a single ecosystem, commercializing these capabilities through its cloud division. Internally, Alibaba is restructuring to boost innovation in AI, with CEO Eddie Wu announcing a new technology committee that includes the firm’s chief AI architect, Alibaba Cloud’s chief technology officer, and the group CTO, with the goal of “accelerating” AI development.
The new data center is expected to scale up to 100,000 chips, creating a computing cluster aimed at applications across industries such as healthcare and advanced materials. In parallel, other Chinese players like Huawei are also bringing online major computing clusters built with domestic AI chips, underscoring a national strategy that differs from that of U.S. tech giants predicted to spend around 700 billion dollars this year on AI infrastructure. Chinese companies are investing less overall but targeting AI deployments in sectors where they anticipate strong revenue growth and returns on investment.
Reference
Kharpal, A. (2026, April 8). Alibaba launches data center with 10,000 of its own chips as China ramps up AI push. CNBC. https://www.cnbc.com/2026/04/08/china-alibaba-data-center-ai-chips-zhenwu.html