Alibaba, Baidu’s IPO plans for AI chip design units heighten China’s self-reliance drive

The plans of Alibaba Group Holding and Baidu to list their semiconductor design units could intensify competition with other domestic artificial intelligence chip developers to unseat Nvidia as the country’s top supplier of high-performance AI processors, according to analysts.

The two Chinese internet peers’ initiatives reflected the strong investor appetite for AI chip firms and growing demand for alternative computing resources in the domestic AI sector, as Beijing pushed for greater technology self-reliance to overcome US tech sanctions.

Before the US and Chinese governments stepped up their regulatory scrutiny of the firm last year, Nvidia said it had 95 per cent of the advanced chip market in China.

Hangzhou-based Alibaba was said to be preparing chip design unit T-Head to go public, according to a Bloomberg report on Thursday, citing people familiar with the matter. Alibaba, owner of the South China Morning Post, did not reply to a request for comment.

Alibaba’s Hong Kong-listed shares gained 2.3 per cent on Friday to close at HK$168.50, following that report.

Kunlunxin (Beijing) Technology, Baidu’s chip design arm, earlier this month confidentially applied for an initial public offering (IPO) in Hong Kong. Details such as the size and structure of the IPO had not yet been finalised, Baidu said.