Alibaba and Baidu Shift to Domestic AI Chips, Challenging Nvidia’s Dominance

Chinese tech giants Alibaba and Baidu are reducing reliance on Nvidia's AI processors by deploying in-house chips for training artificial intelligence models. Alibaba has already utilized its proprietary chips for smaller AI workloads this year, while Baidu is testing its Kunlun P800 chip to power new iterations of its Ernie model. Both companies continue to depend on Nvidia for their most advanced projects, but the strategic pivot underscores China's broader push for technological self-sufficiency.

U.S. export restrictions have accelerated the shift, barring Nvidia from selling its highest-performance chips like the H100 or Blackwell series in China. The H20, the most powerful processor Nvidia can currently offer in the region, now faces competition from Alibaba's comparable domestic alternative. Baidu's Kunlun line further reflects Beijing's mandate to prioritize homegrown semiconductor solutions, aiming to secure supply chains and mitigate geopolitical risks.