Alibaba, Baidu begin using their own chips for training AI models, The Information reports
1. Alibaba is replacing Nvidia chips with internally designed AI chips. 2. This shift could affect BABA's cost structure and competitive edge.
FAQ
Why Bullish?
By developing internal chips, BABA may significantly reduce dependence on Nvidia, potentially lowering costs and improving margins. Historical cases, like Apple with its M1 chips, show how internal designs can enhance profitability and performance.
How important is it?
The move to internal chips indicates a critical shift in BABA's strategic approach, likely impacting its competitiveness and financial health, hence the high importance score.
Why Long Term?
The transition to in-house chips suggests a strategic shift that could yield sustained advantages over time, similar to how tech firms like Google capitalized on custom hardware.