Signage at the Alibaba Group Holdings Ltd. headquarters in Hangzhou, China, on Wednesday, March 24, 2021.
Qilai Shen | Bloomberg | Getty Images
The processor, called Yitian 710, will go into new servers called Panjiu.
The chip and servers will not be directly sold to customers. Instead, Alibaba's cloud computing clients will buy services based on these latest technology. These servers are designed for artificial intelligence applications and storage.
The company did not say when the services based on the latest chip and server will be available for customers.
Alibaba will not be manufacturing the semiconductor but will be designing it instead.
That's a trend among Chinese companies. Huawei designed its own smartphone chips and Baidu raised money this year for a standalone semiconductor business. U.S cloud computing rivals including Google and Amazon have also done the same.