Alibaba Orders Hundreds of Thousands of Huawei AI Chips While AI Spending Erodes Profits
Alibaba has placed bulk orders for hundreds of thousands of Huawei-designed AI chips ahead of DeepSeek’s V4 launch, signaling deeper integration with China’s semiconductor ecosystem. However, heavy AI spending has depressed profits and strained cash flow, raising doubts on if near-term losses justify Alibaba’s long-term AI ambitions.
1. Bulk Orders for Huawei AI Chips
Alibaba joined ByteDance and Tencent in placing bulk pre-orders for hundreds of thousands of Huawei-designed AI chips, reflecting growing confidence in domestic semiconductor performance and readiness for large-scale AI deployment.
2. DeepSeek V4 Integration
DeepSeek’s upcoming V4 model is set to launch in the coming weeks on Huawei chips, with two additional variants tailored for different capabilities; the model’s code has been rewritten and tested jointly with Huawei and Cambricon Technologies to optimize performance on Chinese-made hardware.
3. Financial Impact from AI Investments
Heavy AI spending has depressed Alibaba’s profits and strained cash flow in recent results, prompting scrutiny over whether the near-term financial setbacks will be justified by the company’s long-term AI ambitions.