At a recent conference in Hangzhou, China, Alibaba unveiled its latest advancements in artificial intelligence, introducing the Zhenwu M890 chip and an updated AI model named Qwen3.7-Max. The Zhenwu M890 chip boasts three times the performance of its predecessor, the Zhenwu 810E, making it particularly effective for demanding AI workloads that require extensive memory and rapid communication. This chip is part of Alibaba's strategy to enhance its cloud services and improve profitability. The company has successfully deployed over 560,000 units of its AI chips, indicating strong industrial adoption. Alongside the chip, the Qwen3.7-Max model has been engineered for advanced coding and complex reasoning, further solidifying Alibaba's position in the AI market. Alibaba's management emphasized that scaling up the deployment of these in-house chips represents a significant value proposition, which is expected to enhance the margins of Alibaba Cloud. Despite ongoing challenges with profitability due to heavy investments in AI, the company is optimistic about future returns, projecting that AI-related product revenue will constitute 50% of its cloud unit's external revenue within the next year, becoming a primary growth driver.