Alibaba reveals new AI chip designed for 'agents'

Alibaba on Tuesday announced a new chip designed for agentic capabilities as the Chinese tech giant steps up its semiconductor efforts to fuel its AI push.

The XuanTie C950 is a type of chip called a central processing unit (CPU), which Alibaba said will be able to handle the processing of multi-step tasks carried out by AI agents. The term agent refers to an AI system that can carry out a task on behalf of users.

The CPU will be installed in data centers and is designed for inferencing, the stage that allows for the actual running of AI models.

When it comes to semiconductors and AI, much of the focus so far has been on graphics processing units, or GPUs, a category dominated by tech giant Nvidia. GPUs are critical for training huge AI models because they are able to run multiple calculations at once.

Meanwhile, CPUs run general-purpose tasks sequentially, which is key in a world where agents are being designed to carry out specific actions.

Alibaba's DAMO Academy, which developed the chip design, said the XuanTie CPUs "can be customized for specific inference patterns, supporting customers in tailoring the chips for their own use."

The Chinese tech giant added that when compared to some mainstream products, its CPU achieves over 30% "improvement in performance thanks to its flexibility in customization for specific use cases."

The XuanTie C950 is based on RISC-V architecture, which is a rival to the CPU blueprint created by British firm Arm. Companies pay Arm royalties to use its CPU design, whereas RISC-V is effectively a blueprint that can be used for free.

Alibaba has been building its semiconductor capabilities over the past few years, primarily through its T-Head chip division, which this year released an AI chip called the Zhenwu 810E. Alibaba does not sell these chips to other companies but instead sells its AI services through its cloud computing division.

The importance of the Xuantie CPU "lies primarily in improving supply chain resilience amid scarce computing power and lowering overall costs," said Chelsey Tam, senior equity analyst at Morningstar.

"However, we don't think the launch of this new chip will have a major impact on Alibaba's overall revenue as capacity constraints make it hard for Alibaba to increase chip production drastically."

Chinese companies have faced supply constraints on access to computing power for AI because of U.S. export restrictions on Nvidia chips. That has pushed Chinese companies to ramp up their own semiconductor efforts with some of the country's biggest tech companies and startups launching their own products.

— CNBC's Dylan Butts contributed to this article.