China Unicom has installed Alibaba AI chips at its facility in Xining, Qinghai province
In sum – what to know:
Alibaba AI chips – China Unicom’s new Qinghai data center is powered partly by domestically developed processors, marking a key commercial win for Alibaba.
$390M investment – The facility aims for 20,000 petaflops capacity; it already runs at 3,579 petaflops, using nearly 23,000 local chips.
Homegrown AI hardware – Use of Alibaba, MetaX, and Biren chips reflects Beijing’s strategy to strengthen domestic semiconductor capabilities in critical infrastructure.
Chinese company Alibaba Group has secured a key customer for its artificial intelligence chips, with China Unicom deploying the technology in a major new data center in northwestern China.
Chinese state broadcaster CCTV released a video showing that China Unicom has installed Alibaba-made chips at its facility in Xining, Qinghai province. The site, representing an investment of about $390 million, is expected to reach 20,000 petaflops of computing capacity when fully built, according to the report.
For now, the center is already running at 3,579 petaflops, powered by nearly 23,000 domestically produced AI chips, according to a Reuters report. Alongside Alibaba’s processors, the build-out also includes accelerators from Chinese chipmakers MetaX and Biren Technology.
The new deployment underscores China’s growing push to reduce reliance on foreign chips and boost the adoption of homegrown semiconductor solutions for data centers and AI infrastructure.
Alibaba Group has developed a new artificial intelligence chip designed to handle a wider range of inference tasks, according to a recent Wall Street Journal report citing people familiar with the matter.
The chip, currently undergoing testing, is being manufactured in China, a shift from an earlier generation of Alibaba’s AI processors that were fabricated by Taiwan Semiconductor Manufacturing Company (TSMC), according to the report.
Earlier this year, the U.S. Government blocked sales of Nvidia’s H20 chip, the most advanced processor available to Chinese customers, despite it being specifically designed to comply with export controls.
In August, the Trump administration struck a deal allowing Nvidia to sell H20s in China, provided that 15% of those revenues go to the U.S. government.
Recent reports stated that Nvidia was reportedly preparing a new AI chip for the Chinese market that will outperform its H20 model. Tentatively named B30A, the chip will feature a single-die design, meaning all major components will be integrated onto one piece of silicon. It is expected to provide about half the computing power of Nvidia’s dual-die Blackwell Ultra GPUs, according to previous reports.
Also, Nvidia CEO Jensen Huang recently said there is a “real possibility” that the company’s advanced Blackwell processors could be sold in the Chinese market.
Chinese authorities have discouraged domestic companies from deploying the H20 chip, particularly in government and security-related projects. Chinese authorities also reportedly instructed large firms such as Alibaba, ByteDance and Tencent to pause H20 purchases while a national security review is underway.
China is requiring its data centers to adopt more domestically produced chips, underscoring Beijing’s intention to reduce dependence on foreign semiconductors, according to a previousl report by the South China Morning Post.
State-owned computing hubs in China have been instructed to ensure that over half of their chips come from domestic manufacturers.
