WSJ Tech News Briefing

Episode: TNB Tech Minute: Alibaba Creates AI Chip to Help China Fill Nvidia Void
Date: August 29, 2025
Host: Julie Chang

Overview

This episode delivers a concise update on major tech developments involving Alibaba’s AI chip innovation in response to Nvidia’s regulatory challenges in China, Alibaba's latest financial results amidst fierce delivery market competition, and Dell Technologies’ earnings and outlook amid ongoing AI-driven demand.

Key Discussion Points & Insights

1. Alibaba's New AI Chip Development

[00:16–01:16]

• Background:

  • Alibaba was formerly one of Nvidia’s biggest Chinese customers.
  • Due to regulatory barriers, Nvidia is now restricted from selling advanced chips in China, leaving a critical supply gap.

• Alibaba’s Response:

  • Developed a versatile new chip, going beyond previous purpose-specific designs.
  • The chip is currently in testing and aims to handle a broad range of AI inference tasks.

• Industry Impact:

  • Reflects a broader trend among Chinese chip designers working to fill the void caused by US restrictions.

• Quote:

  "We exclusively report that Alibaba has developed a new chip that is more versatile than its older chips. Alibaba was once one of the biggest customers of American AI chip leader Nvidia. Now it and other chip designers are filling the void..."
  — Julie Chang [00:18]

2. Alibaba Financial Results and Food Delivery Competition

[01:17–01:55]

• Earnings Update:

  • Adjusted net profit dropped 18% to 33.51 billion yuan ($4.7 billion) for the quarter ending June.
  • Despite the drop, net profit surged 78% year-over-year, exceeding expectations.

• Competitive Landscape:

  • Fierce price wars in China's food delivery sector, especially against Meituan and JD.com.
  • The battle for delivery market share is affecting Alibaba's key profitability metrics.

• Quote:

  "The decline comes as Alibaba has been locked in a delivery price war with Meituan and JD.com as it tries to seize market share."
  — Julie Chang [01:40]

3. Dell Technologies' Earnings and Outlook

[01:56–02:15]

• Financial Performance:

  • Dell raised its full-year revenue outlook due to strong AI-related demand.
  • New forecast: $105–109 billion, up from the previous $101–105 billion.

• Profit & Revenue Stats:

  • Q2 profit: $1.16 billion, up from $887 million the previous year.
  • Revenue: $29.78 billion.
  • However, Q3 adjusted earnings per share projection ($2.45 at midpoint) came in below analyst forecasts, raising investor caution.

• Quote:

  "Dell posted a profit of $1.16 billion for the second quarter, compared to $887 million a year earlier. Revenue rose to $29.78 billion, but its view for the third quarter was more worrying to investors."
  — Julie Chang [02:08]

Notable Quotes & Moments

• On AI chip innovation in China:

  "Alibaba is China's biggest cloud computing company. Previous cloud computing chips developed by Alibaba have mostly been designed for specific applications, people familiar with the matter say. The new chip is now in testing and is meant to serve a broader range of AI inference tasks."
  — Julie Chang [00:28]

• On delivery sector competition:

  "...adjusted net profit dropped 18% to 33.51 billion yuan, or $4.7 billion, for three months ended June... Its net profit beat expectations, however, rising 78% from a year earlier."
  — Julie Chang [01:33]

• On AI-driven demand in hardware:

  "Finally, Dell Technologies raised its outlook for the year amid strong AI demand, the company said yesterday..."
  — Julie Chang [01:56]

Timeline of Important Segments

| Timestamp | Segment | Details | |-----------|--------------------------------------------|-----------------------------------------------| | 00:18 | Alibaba's new AI chip | Versatility and context regarding Nvidia | | 01:17 | Alibaba earnings & delivery competition | Net profit drop, ongoing price war | | 01:56 | Dell Technologies’ earnings & outlook | Raised guidance, investor concerns |

Summary

This Tech Minute highlights how Alibaba is taking bold steps to close the gap left by Nvidia’s absence in China, both innovating in AI chip technology and navigating tough market competition in food delivery. Dell Technologies’ update further demonstrates how surging AI demand is driving financial performance, even as cautious investor expectations persist. The episode provides a rapid, insightful snapshot of key movements shaping the global tech landscape.