Alibaba launches in the manufacture of chips

Alibaba creates its own company to manufacture computer chips, China seeking to reduce its dependence on foreign technologies.

China's largest technology company said on Wednesday that the new company would develop artificial intelligence chips for cloud computing, Internet-connected devices and other sectors.

Alibaba's technical director Jeff Zhang said the algorithm and data-based benefits of the e-commerce company place him "in a unique position to lead breakthroughs in disruptive areas like quantum technology." and fleas.

Ali Baba (BABA) has already made several investments in chip makers. Earlier this year, she bought C-Sky, a Chinese chip design company.

Alibaba's executive chairman, Jack Ma, commented on China's heavy reliance on foreign-made chips.

"The flea market is controlled by the United States (…) and suddenly, if they stop selling, what does it mean, you understand," Ma told university students in Tokyo in April. "That's why China, Japan and any country need basic technologies."

Ma's remarks came shortly after the US Department of Commerce prevented American companies from selling ZTE (ZTCOF), a Chinese technology company that relied on US suppliers, including chip makers, to make smartphones and telecommunications equipment.

The ban – since lifted with strict conditions – put ZTE on its knees and stressed the risks of China's reliance on foreign technology.

"The ZTE incident has been an alarm signal" for Chinese leaders, said Minxin Pei, a government professor at Claremont McKenna College in California, at a conference in Hong Kong this month -this.

But Chinese chip makers, who enjoy government support, are struggling to catch up with their more established foreign competitors.

Alibaba has provided little detail on its new chip industry and has not responded to requests for additional information.

The name of the company, Pingtouge Semiconductor Company, refers to a Chinese nickname for the honey badger.

Zhang said at a conference on Wednesday that he hoped the new company would be inspired by the vivid nature of the animal.

"He is afraid of nothing, he dares to do everything," he said.

The honey badger became famous on the internet after a blatant video showed it with perseverance in the face of extreme adversity.

– Serenitie Wang contributed to this report.

CNNMoney (Hong Kong) First published on September 19, 2018: 5:44 AM ET