Key takeaways
- Moonshot AI reportedly accesses roughly 20,000 Nvidia chips through a computing agreement with Alibaba Group.
- The Hopper-generation cluster provides a significant portion of the computing capacity behind Moonshot’s Kimi models.
- Alibaba denied supplying H200 processors but did not reject reports of the broader 20,000-chip arrangement.
- Alibaba shares gained nearly 5 per cent Friday as the deal highlighted the growing importance of its cloud-computing business.
Alibaba Group Holding Limited (NYSE:BABA) shares advanced Friday following reports that Chinese artificial intelligence startup Moonshot AI uses approximately 20,000 Nvidia Corporation (NASDAQ:NVDA) chips through a computing agreement with the technology group.
The cluster represents a substantial part of the infrastructure supporting Moonshot’s Kimi family of AI models, according to Bloomberg News, which cited people familiar with the confidential arrangement.
Alibaba is one of Moonshot’s largest investors and reportedly encourages companies within its investment portfolio to use Alibaba Cloud. Financial terms and the physical location of the computing infrastructure were not disclosed.
Alibaba’s U.S.-listed shares traded nearly 5 per cent higher Friday, while Nvidia gained approximately 1.7 per cent.
Chip model remains disputed
The processors are reportedly drawn from Nvidia’s Hopper generation, which preceded the company’s newer Blackwell architecture and remains widely used for training and operating large AI models.
Several sources identified the processors as H200 chips, the most powerful accelerators in the Hopper family. Alibaba rejected that specific claim.
“The alleged supply of H200 chips to Moonshot from us is completely groundless,” an Alibaba spokesperson told Reuters.
However, the company did not deny providing Moonshot with access to computing capacity based on approximately 20,000 Nvidia processors. It also declined to identify which Hopper chips support the arrangement.
The distinction is significant because U.S. export controls have restricted Chinese access to Nvidia’s most advanced AI hardware. Certain cloud-computing arrangements can still provide remote access to processors located outside China, depending on how the infrastructure and transaction are structured.
Bloomberg also reported that Moonshot has a separate channel for accessing newer Blackwell processors through Southeast Asia and is seeking additional capacity for its next model. It remains unclear whether that access involves permitted computing rentals or direct chip purchases.
Kimi challenges Alibaba’s own AI models
Moonshot recently introduced Kimi K3, a 2.8-trillion-parameter open-weight model that the company says approaches the performance of leading American AI systems on some benchmarks.
Kimi has also reportedly surpassed Alibaba’s Qwen models on several performance measures, despite the two developers having access to similar computing resources. The result illustrates the unusual relationship between the companies: Alibaba is simultaneously Moonshot’s investor, infrastructure provider and AI competitor.
For Alibaba investors, the arrangement demonstrates how the company can benefit from China’s AI expansion through its cloud business even when another developer produces the underlying model. It also highlights continued Chinese demand for Nvidia hardware despite government efforts to encourage greater adoption of domestically produced chips.
The reports have not been independently verified by Reuters, while Moonshot and Nvidia have not publicly commented on the arrangement.