Nvidia Strikes Alibaba Deal As AI Race Heats Up

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(RTTNews) - Nvidia has been making deals lately. The chipmaker has teamed up with Alibaba of China to broaden its AI reach, just days after announcing a $100 billion commitment to OpenAI and a $5 billion stake in Intel.

Alibaba announced that it will incorporate Nvidia's AI development tools which include robotics, self-driving cars, and smart spaces into its cloud platform.

Nvidia's Physical AI software, which creates 3D models of real-world settings to train models with synthetic data, will be made available to customers through the partnership. There was no disclosure of the financial terms.

The action indicates Alibaba's renewed interest in artificial intelligence. The business is increasing cloud investment beyond its $50 billion budget and recently introduced Qwen 3-Max, a trillion-parameter language model it claims is its most sophisticated to date.

Alibaba Cloud maintained its 33 percent market share in China's cloud market with a 26 percent revenue growth last quarter.

Alibaba's domestic chip development has also accelerated as a result of Beijing's ban on Nvidia chips. With performance reportedly comparable to Nvidia's H20 chips, its T-Head unit currently provides the majority of AI chips for Chinese data centers.

Alibaba is becoming a more desirable AI play for investors due to its modest pricing a forward PE near 20 and AI momentum, which contrast with Nvidia's much richer multiple.