Alibaba Stock Rises Over 2% Premarket As AI Chip Offerings Sought By Top Chinese Telecom Firm

Alibaba has signed on China Unicom, the nation's third-largest telecom firm, as a customer for its artificial intelligence-capable chips, sending U.S.-listed shares of the Chinese tech giant up 2.5% in early premarket trading on Wednesday.

The development, seen as a substantial win for Alibaba's nascent chip development effort, lifted the company's Hong Kong shares by 5.5%, bringing them within touching distance of a five-year high. 

China Unicom will deploy Alibaba's Pingtouge or "T-Head" AI accelerators in its new data center in northwestern China, alongside accelerators provided by rivals MetaX and Biren Technology, according to a video posted late Tuesday by state broadcaster CCTV, as reported by Bloomberg.

Products from Alibaba's T-Head unit compete with those from Huawei Technologies and Cambricon Technologies. Alibaba in February committed to investing over $53 billion in AI infrastructure, such as data centers, over the next three years, underscoring its ambitions of becoming a leader in AI.

The agreement comes as Alibaba rolls out AI models at a fast clip and the increasing involvement of co-founder Jack Ma in company affairs this year.

On Stocktwits, retail sentiment toward BABA remained "bullish" for a second straight day, with users expressing enthusiasm over the stock's recent strength.

"$BABA I love u nvidia but I love Alibaba more," remarked one user.

As of last close, BABA stock is up 93% year-to-date.

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