China’s Alibaba and Baidu have started using their own AI chips to train models, partly replacing Nvidia processors, according to The Information.

Alibaba has used its in-house chips for smaller AI models since early 2025, while Baidu is testing its Kunlun P800 chip for new versions of its Ernie AI model. Both companies continue to use Nvidia chips for their most advanced models.

The shift marks a move toward China’s self-reliance in AI amid U.S. export restrictions on advanced AI chips. Alibaba’s chips are now reportedly competitive with Nvidia’s H20 chip, though Nvidia’s high-end H100 and Blackwell series still outperform Chinese alternatives.

Nvidia acknowledged the rising competition and continues discussions with the U.S. government to allow limited chip sales to China.

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