Alibaba (BABA) is exploring a major purchase of advanced artificial intelligence (AI) chips from Advanced Micro Devices (AMD), MLex reported. The move reflects efforts by China’s tech giants to expand their AI infrastructure amid strict U.S. export controls.
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Sources familiar with the discussions said that Alibaba is evaluating an order of 40,000 to 50,000 units of AMD’s MI308 AI accelerators, one of the company’s newest data-center-class processors designed for large-scale AI workloads.
For Alibaba, the timing is crucial. The company is rapidly expanding its cloud and AI capabilities. Also, it is strengthening the computing power behind its large language models and enterprise AI services, which require high-performance accelerators.
Policy Shift Opens Door for AMD’s MI308 Chips in China
The potential order comes on the heels of President Trump’s recent decision to allow limited GPU sales to China, reopening the door for companies such as Nvidia (NVDA), Intel (INTC), and AMD to resume exports under updated trade conditions.
While the restrictions still cap performance levels, the policy shift has created a narrow but meaningful window for Chinese firms to access U.S. AI hardware.
It must be noted that the MI308 is a version of AMD’s AI chip designed to fall within U.S. export control performance limits for the Chinese market, meaning it is not AMD’s most advanced chip.
Adding to the momentum, AMD CEO Lisa Su met with China’s Commerce Minister Wang Wentao last week to discuss the company’s operations and potential cooperation in the region.
Alibaba Is Looking Beyond Nvidia
Alibaba Cloud has long relied on Nvidia GPUs to train and deploy its AI systems. However, U.S. regulations limiting the export of Nvidia’s top-tier chips to China have led companies such as Alibaba, Tencent (TCEHY), and Baidu (BIDU) to rethink their hardware strategies.
AMD has emerged as one of the few alternatives. Its MI300‑series accelerators have been gaining traction among U.S. cloud providers and enterprise customers, positioning AMD as a strong competitor in the AI chip market.
If Alibaba moves forward with an order, it would mark a meaningful win for AMD in a market where Nvidia has long dominated. Even limited access to China’s cloud giants represents a multi-billion-dollar opportunity, especially as AI workloads surge.
Also, the deal would further validate AMD’s progress in closing the performance gap with Nvidia.
Is AMD a Buy or Sell Now?
Turning to Wall Street, AMD stock has a Strong Buy consensus rating based on 31 Buys and nine Holds assigned in the last three months. At $281.78, the average AMD price target implies a 31.36% upside potential.
Is BABA a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Strong Buy consensus rating on BABA stock based on 17 Buys and two Holds assigned in the past three months, as indicated by the graphic below. Further, the average Alibaba price target of $201.96 per share implies 33.74% upside potential.
