Alibaba Group Holding Ltd. has developed a new artificial-intelligence processor intended for inference workloads, the Wall Street Journal reported, citing people familiar with the matter. The chip is said to handle a broader range of tasks than current domestic offerings and remains compatible with Nvidia’s widely used software tools, potentially easing integration for Chinese customers. The move is the latest effort by China’s technology sector to reduce reliance on U.S. semiconductors after Washington tightened export controls on advanced chips, including Nvidia’s H20. By focusing on inference—running trained AI models rather than training them—Alibaba can sidestep some of the most advanced manufacturing requirements while still addressing a large share of demand in data centers and cloud services. Investors took note of the competitive threat: Nvidia shares slipped about 1.2% in U.S. pre-market trading following publication of the report. While the new processor is unlikely to replace Nvidia’s top-end training chips, its launch underlines intensifying competition in AI hardware and Beijing’s push for home-grown alternatives.