Alibaba Group Holding Ltd. is launching what it describes as China's most powerful AI chip, an accelerator designed to rival Nvidia and support a massive expansion of data center capacity in the coming years.

The e-commerce giant, now aiming to bolster its AI presence, unveiled a new accelerator called the ChenWu V900, which it claims delivers three times the performance of its predecessor. CEO Eddie Wu said the accelerator, developed by Alibaba's T-Head chip division, can be clustered with up to 500,000 units to run frontier model training operations.

Alibaba is among the biggest AI spenders among major Chinese companies. It has pledged to invest over $53 billion over three years to expand its AI capabilities and raised approximately $10.2 billion from an additional share offering in Hong Kong in August. On Tuesday, Wu set a target of reaching 20 gigawatts of data center capacity for Alibaba Cloud by 2032, based on his expectation of exponential growth in AI demand.