The U.S.-China Trade War Means Alibaba Is Producing Its Own Chips

In March, Shanghai began testing a service that lets subway passengers walk right onto a platform, using their faces or voices to pay the fare. A voice-recognition system identifies them and dings their Alipay accounts accordingly. Soon, as trials expand, millions of riders may not need cash, or a wallet, or even a cellphone to get around. They’ll just need Alibaba.

The Hangzhou-based e-commerce company’s ambitions in China—from facial recognition in subways to cloud computing—have never required more computing power. To satisfy its own bottomless demand, Alibaba Group Holding Ltd. has added a member to its corporate family: Pingtou Ge, a subsidiary that will design semiconductors tailored for artificial intelligence. It’s part of the company’s pledge to heave $15 billion into research and development on AI, quantum computing, and more. If the chip business succeeds, it has the potential to accelerate a larger shift in how the world’s computing hardware gets produced.