2018/10/01: China's biggest tech firm announced Wednesday that the new business will develop artificial intelligence chips for cloud computing, internet-connected devices and other sectors.
Alibaba's chief technology officer, Jeff Zhang, said the e-commerce company's advantages in algorithms and data put it in "a unique position to lead real technology breakthroughs in disruptive areas, such as quantum and chip technology."
Alibaba (BABA) has previously made several investments in chipmakers. Earlier this year, it bought C-Sky, a Chinese chip design firm.
Alibaba Executive Chairman Jack Ma has been vocal about addressing China's heavy reliance on foreign-made chips.
"The market for chips is controlled by America ... and suddenly if they stop selling, what that means, you understand," Ma told university students in Tokyo in April. "That's why China, Japan and any country — you need core technologies."
Ma's remarks came shortly after the US Commerce Department blocked American companies from selling parts to ZTE (ZTCOF), a Chinese tech company that relied on US suppliers, including chipmakers, to manufacture smartphones and telecommunications equipment.