Alibaba Unveils Zhenwu V900 AI Chip, Targets 2027 Mass Production as Nvidia Retreats From China

Alibaba (BABA) announced its Zhenwu V900 AI chip on Sept. 22, 2026, claiming it is three times faster than its predecessor, with mass production targeted for the first quarter of 2027. The chip aims to serve as a domestic alternative to Nvidia (NVDA) hardware in China, where large tech companies have halted purchases of U.S. AI chips amid ongoing trade tensions. China accounted for roughly 9.1% of Nvidia's fiscal 2026 operating revenue. Domestic rivals including Huawei, Cambricon and Baidu (BIDU) are also designing in-house chips, but manufacturing constraints at SMIC — which lacks EUV lithography access due to sanctions — limit volume and cost competitiveness. Analysts expect any meaningful Chinese AI chip market impact in the 2030s, not near term. BABA stock has fallen 45% from its 52-week high of $191.07, though it remains valued at more than 18 times forward earnings, above Nvidia's roughly 15 times based on fiscal 2028 estimates.