China's Alibaba doubles down on chips amid cloud computing push

HANGZHOU, China, Sept 19 (Reuters) - Alibaba Group HoldingLtd will set up a dedicated chip subsidiary and aims tolaunch its first self-developed AI inference chip in the secondhalf of 2019 that could be used for autonomous driving, smartcities and logistics.

The Chinese firm said at an event in Hangzhou on Wednesdaythat the new subsidiary would make customised AI chips andembedded processors to support the firm's push into fast-growingcloud and internet of things (IoT) businesses.

Alibaba's aggressive drive to develop its own semiconductorscomes as China's government looks to raise the quality ofhome-made chips to help propel high-tech domestic industriesfrom cutting-edge transport to AI healthcare systems.

In April, Alibaba bought a Chinese microchip maker HangzhouC-SKY Microsystems to help bolster its cloud-based "internet ofthings" (IoT) business.

Jack Ma, Alibaba co-founder and chairman, said then thatChina needed to control its "core technology" like chips toavoid over-reliance on U.S. imports, something which has beenput in the spotlight by whipsawing trade tensions.(Reporting by Cate Cadell; Writing by Adam Jourdan; Editing byDarren Schuettler)

Alibaba Group H