Alibaba and ByteDance move AI training overseas for the sake of Nvidia chips - FT

Chinese tech giants, including Alibaba and ByteDance, have begun actively resorting to training their latest artificial intelligence models in data centers across Southeast Asia, Financial Times sources claim. This allows them to gain access to Nvidia's most powerful AI chips, which have been banned from being shipped to China.

Companies from China typically enter into lease agreements to use the capacity of foreign data centers owned and operated by non-Chinese entities, sources told the FT. This practice is not now at odds with Washington's requirements: export control regulations drafted by Joe Biden's administration shortly before he left office and designed to close this loophole have been repealed by President Donald Trump.

Singapore and Malaysia are seeing a boom in data centers fueled by Chinese demand. Many are equipped with high-performance Nvidia AI chips similar to those used by US tech giants to train their neural networks. "Coming here is an obvious choice. You need the best chips to train the most advanced AI models, and it's fully compliant with the legislation here," an operator at a data center in Singapore told the FT.

The exception is DeepSeek, a creator of high-quality and inexpensive AI models. The company trains them in the PRC, as it managed to build up a "significant cluster" of Nvidia chips before U.S. export bans came into effect, sources told the British publication. In China, DeepSeek is working closely with state-owned Huawei to optimize and develop the next generation of Chinese AI chips, they said.

Alibaba, ByteDance, DeepSeek and Huawei did not respond to the FT's questions, while Nvidia declined to comment.

Reuters names ByteDance's chatbot Doubao as the most popular consumer AI app in China. Alibaba's Qwen has gained widespread adoption among developers outside China as an effective free solution: all of the top ten open source AI models in the world are based on Qwen, the Alibaba Group-owned South China Morning Post reported in February 2025, citing data from U.S. platform Hugging Face.

Alibaba, whose AI business until recently focused on corporate clients, is stepping up its expansion into the consumer segment. In mid-November, the company launched the Qwen chatbot in the form of a mobile application. It was downloaded 10 million times in the first week. On Nov. 27, Alibaba launched its first Quark AI smart glasses with Qwen for 3,800 yuan ($536), while its possible competitor Meta Ray-Ban Display costs $799, CNBC reported.

Quotes of Alibaba jumped by 1.7% at the opening of trading in Hong Kong, then the growth rate slowed to about 1%. Since the beginning of 2025, one of the main "blue chips" of the Hong Kong Stock Exchange rose in price by more than 80%.

According to FactSet, almost all analysts covering Alibaba securities - 49 out of 52 - recommend them for purchase with Buy or Overweight ratings. The average target price calculated by MarketScreener suggests a 25% upside potential for the Chinese company's stock price over a one-year horizon.

This article was AI-translated and verified by a human editor