Alibaba is considering increasing its investment in artificial intelligence infrastructure and cloud computing over the next three years to about RMB 480 billion, up from a previously discussed level of RMB 380 billion, according to Chinese technology publication LatePost, which cited people familiar with the matter.

US-listed Alibaba shares rose 1.1% in premarket trading.

The company has developed its own domestically produced AI chip, known as Zhenwu 810E, the report said. Outside China, however, Alibaba has been procuring large volumes of graphics processing units and transporting them by truck, reflecting tight supply conditions in the global AI hardware market.

During the most aggressive phase of its expansion, Alibaba even turned to consumer-grade GPUs, including Nvidia’s RTX 4090, purchasing them in significant quantities to build inference clusters and boost inference capacity, people familiar with the matter said.