Alibaba Group Holding Limited (BABA  ) is stepping up its push into artificial intelligence infrastructure with the launch of a high-end, self-developed AI chip, part of a broader effort to reduce reliance on Nvidia Corp.'s (NVDA  ) as U.S. export controls restrict China's access to advanced semiconductors. On Thursday, Alibaba's semiconductor design unit, T-Head, released technical specifications for its advanced parallel-processing unit, the Zhenwu 810E. According to T-Head's website, the Zhenwu 810E is a fully in-house-designed application-specific integrated circuit built to handle both AI training and inference workloads.

The chip is aimed at the high data-throughput requirements of generative AI and delivers performance broadly comparable to Nvidia H20, a GPU tailored for the Chinese market, SCMP reported. Before U.S.-China regulatory tensions escalated, Nvidia said it controlled about 95% of China's advanced AI chip market.

Alibaba Cloud Scales Deployment

T-Head said the Zhenwu 810E is already operating in multiple 10,000-card clusters within Alibaba Cloud and is being used by large external customers.

Technode reported the chip now supports more than 400 clients, including State Grid, the Chinese Academy of Sciences, and XPeng (XPEV  ), and has been optimized for training and inference of Alibaba's Qwen large language models.

Separately, Reuters reported that more than 400,000 Nvidia H200 units are expected to be shipped to Chinese customers, including ByteDance, Alibaba, and Tencent Holding Ltd. (TCEHY  ).

IPO Plans for Chip Units Take Shape

The push comes as Alibaba and Baidu Inc. (BIDU  ) move toward spinning off their chip divisions. Bloomberg reported Alibaba plans to restructure T-Head into a partially employee-owned business before considering a public listing.

Founded in 2018, T-Head designs computing and storage chips. Baidu is preparing a Hong Kong IPO for its Kunlunxin unit that could raise up to $2 billion, while retaining about 59% ownership.

BABA Price Action: Alibaba shares were down 1.24% at $172.09 during premarket trading on Friday, according to Benzinga Pro data.