Alibaba plans to build its own neural network chip with the acquisition of Chinese AI chipmaker

E-commerce giant Alibaba Group Holding announced it has acquired China’s proprietary embedded company, C-SKY Microsystems, to further its cloud-based “internet of things” (IoT) business. The news was first reported on China’s website, QQ.com. Alibaba Group announced that it will wholly acquire the company. The announcement comes a few days after the United States government banned U.S. firms from selling chips and other components to Chinese telecoms company C-SKY Microsystems for seven years.

“The acquisition is an important step for Alibaba’s chip development,” said Zhang Jianfeng, chief technology officer of Alibaba. Alibaba said the purchase of C-SKY Microsystems will help unify the two companies’ R&D capability amid China’s campaign to gain self-reliance in key technology. Alibaba has previously invested in five chip manufacturers, including US AI chip designer Kneron and Barefoot Networks. Back in 2015, Alibaba partnered with Hangzhou C-SKY Microsystems to develop the Yun On Chip (YoC). In November 2016, Alibaba and Tencent also invested US$23 million in California chip company Barefoot Networks.

C-SKY Microsystems claims to be the only self-embedded CPU IP Core company currently mass-produced in mainland China, focusing on 32-bit embedded CPU IP R&D and large-scale application, for multimedia, security, and family applications. The company’s chips are used in areas such as IoT, transportation, and smart cities. The company has shipped more than 700 million chips worldwide.

“Our  team is committed to promoting the independent R&D and innovation capabilities of domestic CPUs. After joining Alibaba, we hope to promote large-scale commercial production of self-owned domestic chips through Alibaba’s powerful technology platform and ecosystem integration capabilities. Accelerate the advancement of the application of ‘China Core’ in various fields,” C-SKY Microsystems founder, Yan Xiaolang, said.

Alibaba’s CTO Zhang Jianfeng said,”The acquisition of Zhongtian Micro is an important part of Alibaba’s chip layout.” He went on to say that, “The IP Core is the core of basic chip capabilities, and entering the IP Core area is the basis for China’s chips to achieve “independent and controllable.” According to 2016 data, China’s chip import amounts to US$230 billion worth of chips, which almost doubled the amount China spent on crude oil import.