It’s not just Arm Holdings (NASDAQ:ARM | ARM Price Prediction) that’s betting big on the future of agentic AI with its new AGI CPU; Chinese tech giant Alibaba (NASDAQ:BABA) also has a new chip that specializes in running next-generation AI agents. Undoubtedly, if you’ve completely written off Alibaba or any of the other Chinese internet stocks amid their latest slump, you’re definitely not alone. Still, for investors willing to invest beyond the U.S. to diversify their AI growth portfolio or to take advantage of better prices, it’s still worth keeping some tabs on the Chinese AI leaders.
Given the different regulatory environment they operate in, Chinese AI players may very well have advantages that the U.S. comparables don’t have. At the same time, though, they might also have issues procuring the latest and greatest Nvidia (NASDAQ:NVDA) GPUs or other critical pieces of hardware where America retains the advantage.
Alibaba is betting big on agents, but you wouldn’t know that from looking at the stock
Either way, Alibaba has to be one of the go-to non-U.S. AI plays to watch very closely as shares continue to plunge deeper into the depths of a bear market. With shares of Alibaba down close to 36% from 52-week highs and more than 60% from its all-time highs not seen since 2020, many everyday investors have seemed to have forgotten about the name. Whether it’s the quarterly earnings misses or unease about the CapEx to stay competitive in the AI wars, many of the same woes weighing down America’s hyperscalers seem to also be acting as a bit of an overhang on Alibaba stock.
Either way, shares are currently going for 21.7 times trailing price-to-earnings (P/E), which now only represents a slight discount to the cheapest that the Mag Seven has to offer. Looking a year into the future, though, and the value case for shares of Alibaba gets that much stronger, with the 16.7 times forward P/E multiple. Combined with new agentic models, like Qwen 3.6-Plus, as well as new agentic AI chips, and perhaps Alibaba might be a name that’s closer to the front of the AI agent race than most investors give it credit for.
More recently, Alibaba pulled the curtain on its XuanTie C950 agentic AI CPU. The performance is quite solid, but the biggest takeaway, I think, is that the chip is based on the RISC-V architecture rather than Arm. The big question here is whether RISC-V has what it takes to be as competitive as Arm in the agent era and whether Chinese firms can make up for lost time as we move from GPUs to agentic AI CPUs.
It’s still hard to tell in these early stages. But I do think Alibaba has a very strong offering with an architecture that might be the big answer to ARM. Either way, as an AI investor, I’d think strongly about covering more bases at this point in the silicon race.
China’s rise of one-person companies might be a sign that the agentic AI opportunity is very real
Of course, agentic AI carries a lot of buzz following the fast rise of OpenClaw and Moltbook. And while “one-person companies” with swarms of AI agent colleagues still sounds like a science-fiction scenario that’s many decades into the future, I’d argue that such a future may already be the present, especially when you look into markets like China, which is already experiencing a boom of solo entrepreneurs who’ve embraced the rise of agentic AI.
Alibaba president Kuo Zhang recently highlighted the surge in these so-called one-person companies, thanks in part to the rise of agents. With the open-source OpenClaw experiencing a boom in China despite the potential for issues, I do think that China remains a market worth watching very closely as the AI race moves forward with agents now in the driver’s seat.
In the meantime, Alibaba stands out as an agentic AI CPU maker to watch while we uncover the potential behind the RISC-V architecture. Has Arm met its match? And is Alibaba the firm to bring out the best in RISC-V? As always, time will tell.
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