Alibaba Group Holding Limited (NYSE:BABA) stock rose Thursday after signs of expanding reach nvidia corp (NASDAQ:NVDA) advanced artificial intelligence chips in China.
The Chinese e-commerce giant pared some gains in early trading Friday, after rising more than 5% in the previous session. Thursday’s move comes after reports that China may approve limited imports of Nvidia’s H200 chips this quarter.
Nvidia is tightening sales of H200 artificial intelligence chips to China as it works to reopen a vital market while managing geopolitical tensions between Washington and Beijing.
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The company will now require Chinese customers to pay in full for H200 orders and accept strict, no-flexibility terms, Reuters reports.
At the same time, Chinese regulators are preparing to approve limited H200 imports for select commercial uses this quarter, while restricting access for the military, sensitive government agencies and state-owned enterprises, according to Bloomberg.
Authorities have also asked some Chinese technology firms to temporarily halt orders and are considering requirements that buyers buy domestically manufactured chips alongside Nvidia products.
Against that backdrop, Alibaba has privately told Nvidia it is interested in ordering more than 200,000 units of the H200, Bloomberg reported on Friday, citing a source familiar with the matter.
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Investors reacted on expectations that China would allow domestic companies to use Nvidia’s H200 chips, a development that would support companies like Alibaba. Way-Cern Genderthe managing director of Union Bancaire Privé told Bloomberg on Friday.
The H200 is an older generation chip that the Trump administration has said could be exported to China amid rising geopolitical tensions between the countries.
Alibaba has emerged as the biggest AI spender among Chinese technology companies, and more reliable chip supply will strengthen its cloud business.
The stock is up 92% over the past 12 months, driven by strong investor confidence in its substantial investments and growth in AI, particularly in its cloud computing division.
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