Alibaba's homegrown AI chips rival NVIDIA H20, backed by $3.2 billion bond financing.

Alibaba Group Holding Limited saw its stock jump 6.35% to HK$152.40 ($19.58) on the Hong Kong Exchange on Friday morning, extending its remarkable 83.95% year-to-date gains. The rally reflects investor confidence in the Chinese e-commerce giant's aggressive artificial intelligence expansion strategy and a substantial $3.2 billion fundraising effort announced recently.

The company raised the $3.2 billion through zero-coupon convertible bonds, with nearly 80% of proceeds earmarked for data center expansion and technology upgrades. The senior note, maturing September 15, 2032, converts into U.S.-listed shares, signaling Alibaba's commitment to long-term infrastructure investment in its AI capabilities.

This fundraising surge follows Alibaba's announcement of a 380 billion yuan ($53 billion) three-year investment commitment in artificial intelligence and related technologies. The company's Cloud Intelligence Group has already demonstrated strong momentum, posting 26% revenue growth to $4.66 billion in the latest quarter, indicating that the AI strategy is delivering measurable results.

A significant development in China's AI landscape comes from reports that Alibaba's in-house designed AI chip is now competitive with Nvidia's H20. According to The Information, citing three employees familiar with the technology, Alibaba has deployed its own chips for smaller AI models since early 2025, reducing reliance on Nvidia Corp. processors. This shift represents a meaningful step toward technological independence in China's AI sector, where companies have traditionally depended on Nvidia's processors.