THE IMPACT OF ALIBABA’S AI CHIP DEVELOPMENT ON PRODUCTION COSTS, INVESTMENT, AND THE COMPETITIVENESS OF THE SEMICONDUCTOR INDUSTRY IN THE UNITED STATES AND CHINA

Abstract

The development of artificial intelligence (AI) has significantly transformed the global semiconductor industry. This study aims to analyze the impact of Alibaba’s AI chip development on production costs, investment, and competitiveness in the semiconductor industry in the United States and China. This research uses a qualitative descriptive approach with a literature review method. The findings show that the development of Alibaba’s AI chips increases production costs in the short term due to high research and development (R&D) expenses and infrastructure investment. However, in the long term, it can reduce production costs through efficiency and economies of scale. In addition, this development encourages increased investment, particularly in China, supported by government policies. In terms of competitiveness, Alibaba’s AI chips strengthen China’s position in the global semiconductor industry, although the United States still maintains leadership in advanced technology.