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Alibaba Group Holding disclosed its plans to establish a new subsidiary dedicated to chips with the aim of launching the first self-deployed AI interference chip in Q2 2019 capable of enabling autonomous driving, smart cities and logistics.

The new subsidiary will focus on making customized AI chips and embedded processors in order to develop the company’s cloud and IoT business.

This plan comes at a time when China is looking to promote home-made chips in order to accelerate the development of local technology industries that include smart transportation and e-health systems.

According to Reuters, Jack Ma, Alibaba co-founder and chairman, said that China needed to control its “core technology” like chips to avoid over-reliance on U.S. imports, something which has been put in the spotlight by whipsawing trade tensions.

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