2 months Alibaba launches new server chip to boost its cloud business in challenge to Amazon and Microsoft Reddit    

Chinese e-commerce giant Alibaba launched a new server chip on Tuesday, as it looks to boost its cloud computing business and compete against U.S. rivals like Amazon. The processor, called Yitian 710, will go into new servers called Panjiu. The chip and servers will not be directly sold to customers. Instead, Alibaba’s cloud computing clients will buy services based on these latest technology. These servers are designed for artificial intelligence applications and storage. Alibaba will not be manufacturing the semiconductor but will be designing it instead. That’s a trend among Chinese companies. Huawei designed its own smartphone chips and Baidu raised money this year for a standalone semiconductor business. U.S cloud computing rivals including Google and Amazon have also done the same.

Alibaba sees cloud computing as a key part of its future growth but it currently accounts for 8% 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 China’s largest cloud computing player, according to market analyst firm Canalys, but rivals are investing heavily to catch up. As U.S. sanctions continue to hit Huawei’s smartphone business, the company is also looking to boost its revenue from cloud. Alibaba has been trying to expand its cloud business internationally but still trails the likes of Amazon and Microsoft in terms of global market share.

Companies are investing in their own chips as a way to have custom-designed silicon that can power specific applications as a way to differentiate from the competition. “Customizing our own server chips is consistent with our ongoing efforts toward boosting our computing capabilities with better performance and improved energy efficiency,” Jeff Zhang, president of Alibaba Cloud Intelligence, said in a press release.


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