Alibaba to make customised AI chips; teams up with SAP for cloud services

Alibaba Group Holding Ltd will set up a dedicated chip subsidiary and aims to launch its first self-developed AI inference chip in the second half of 2019 that could be used for autonomous driving, smart cities and logistics.

The Chinese firm said at an event in Hangzhou on Wednesday that the new subsidiary would make customised AI chips and embedded processors to support the firm's push into fast-growing cloud and internet of things (IoT) businesses.

Alibaba's aggressive drive to develop its own semiconductors comes as China's government looks to raise the quality of home-made chips to help propel high-tech domestic industries from cutting-edge transport to AI healthcare systems.

In April, Alibaba bought a Chinese microchip maker Hangzhou C-SKY Microsystems to help bolster its cloud-based "internet of things" (IoT) business.

Jack Ma, Alibaba co-founder and chairman, said then that China needed to control its "core technology" like chips to avoid over-reliance on US imports, something which has been put in the spotlight by whipsawing trade tensions.

SAP partnership

SAP SE, the German business software company, said on Wednesday, it was teaming up with Alibaba to offer its flagship products on the Chinese company's cloud infrastructure.

SAP Chief Executive Bill McDermott said the group would offer its S/4HANA Cloud and SAP Cloud Platform products via Alibaba, enabling companies in China run their business processes using an Infrastructure as a Service (IaaS) model.

SAP, Europe's most valuable technology company, also cooperates with U.S. cloud providers as it encourages clients to make a transition away from running its software on on-site servers to remote data centres.

It recently launched a new marketing suite, called C/4HANA, which competes directly with cloud-based U.S. rival Salesforce.