Page 43 - Bloomberg Businessweek-October 29, 2018

+ The Cloud

S

O Alibaba’s Chip

L Dreams

U

T The e-commerce company is designing

and making its own semiconductors
I heave $15 billion into research and development

business succeeds, it has the potential to accel-
O erate a larger shift in how the world’s computing
44 on AI, quantum computing, and more. If the chip
hardware gets produced.
Microsoft Corp. and Google already launched
N in-house silicon teams, deploying the hardware
for their server farms and as add-ons to their
cloud services. The specialized demands of
cloud and AI capabilities make in-house man-
S ufacturing more practical, despite the expense.
Alibaba, China’s largest cloud provider, is roll-
ing out its first chips next year. “They’re sort of

AllianceBernstein LP.
In March, Shanghai began testing a service that late to this game,” says Mark Li, an analyst with
lets subway passengers walk right onto a plat- Chinese companies have never rivaled the
form, using their faces or voices to pay the fare. U.S., Taiwan, and South Korea in producing the
A voice-recognition system identifies them and most advanced computer chips. But China is
dings their Alipay accounts accordingly. Soon, adamant about not missing the next lucrative
as trials expand, millions of riders may not need wave— silicon designed to handle AI tasks such
cash, or a wallet, or even a cellphone to get as object detection and voice recognition.
around. They’ll just need Alibaba. That mission has taken on increasing urgency
The Hangzhou-based e-commerce com- thanks to Donald Trump. The trade war between
pany’s ambitions in China—from facial recog- the U.S. and China, spurred by the president’s
nition in subways to cloud computing—have heightened economic rhetoric, has made the
never required more computing power. To sat- Chinese wary of relying on tech from outside its
isfy its own bottomless demand, Alibaba Group borders. And while the White House has fought
Holding Ltd. has added a member to its corpo- to limit China’s tech potential, citing concerns
rate family: Pingtou Ge, a subsidiary that will about intellectual property and security, China’s ILLUSTRATION BY LIA KANTROWITZ
October 29, 2018 design semiconductors tailored for artificial central government is providing massive subsi-
intelligence. It’s part of the company’s pledge to dies for manufacturing and AI.
Edited by
Dimitra Kessenides