Alibaba and Google, the AI trade's comeback kids

Core Insights - Alibaba's updated consumer chatbot has achieved 10 million downloads within a week of its relaunch, indicating strong market interest and potential competitive advantage [1][2] - The company is positioned as a full-stack provider, controlling hardware, cloud models, and consumer applications, which enhances its competitive edge against rivals [2][3] - Alibaba is developing a new AI chip to mitigate reliance on Nvidia, aligning with China's broader goal of establishing a self-sufficient AI supply chain [4][9] Company Performance - Alibaba's stock has nearly doubled this year, but its valuation remains lower than competitors, trading at about 23 times forward earnings [5] - The upcoming earnings report will be critical in determining if Alibaba can sustain its AI momentum and attract investor interest [5] Industry Dynamics - Chinese tech companies, including Alibaba, are advancing their AI capabilities at a lower cost compared to U.S. counterparts, potentially reshaping the competitive landscape [6] - There is uncertainty regarding the future of Nvidia's exports to China, but Chinese firms are proactively developing their own hardware and ecosystems [7][8] - The potential for Chinese tech to export their hardware globally poses a challenge to the dominance of U.S. technology in the AI sector [10]