Alibaba, Nvidia Join Forces on Physical AI and Cloud Expansion

Alibaba and Nvidia have struck a deal to bring Nvidia’s physical AI development tools to Alibaba Cloud, targeting real‑world applications such as humanoid robots, autonomous vehicles, and connected “smart” facilities across factories and warehouses.

Announced on Wednesday, the partnership emphasizes software, tooling, and ecosystem integration rather than chip sales, arriving a month after China’s Cyberspace Administration reportedly asked domestic AI vendors, including Alibaba, to avoid purchasing Nvidia GPUs.

Global cloud push

Alibaba paired the Nvidia announcement with a major infrastructure expansion. The company plans to open new data centers and extend its footprint in multiple regions over the coming year, signalling a stronger move into Western markets for a provider that has long been dominant in Asia.

• New data centers: Brazil, France, and the Netherlands
• Additional facilities planned: Mexico, Japan, South Korea, Malaysia, and Dubai

Alibaba also unveiled an AI Catalyst Program designed to help AI startups grow and scale on its platform.

Analysts: A strategic win for Nvidia

Industry analysts view the tie-up as advantageous for Nvidia despite geopolitical headwinds. David Nicholson of Futurum Group said the deal gives Nvidia deeper “stickiness” with a major cloud provider, reinforcing its relevance in global AI even as governments spar over hardware access. He framed it as a different kind of victory—less about GPUs today and more about embedding Nvidia’s software stack where AI workloads are being developed and deployed.

Steven Dickens, CEO and analyst at HyperFrame Research, said broadening the number of cloud and service providers built on Nvidia’s stack helps the chipmaker sustain its lead in the AI race. He questioned why any large platform would choose not to partner with Nvidia given its pace of innovation.

Why Alibaba is aligning with Nvidia software

For Alibaba, analysts say the calculus is time-to-market and capability depth. Nicholson noted that adopting a complete, proven software stack can be more efficient than recreating it in-house. He contrasted Alibaba’s approach with Chinese startup DeepSeek, which used Nvidia chips but deliberately avoided Nvidia software earlier this year; Alibaba is doing the opposite by embracing Nvidia’s software even as access to its latest chips remains constrained.

The broader bet is that Nvidia’s expanding portfolio across robotics, autonomous systems, and smart environments will accelerate Alibaba Cloud’s offerings in “physical AI,” where digital models drive machines operating in the real world.

The future outlook

The collaboration strengthens Nvidia’s ecosystem position and gives Alibaba a faster route to deploy advanced robotics and edge AI capabilities globally. The long-term payoff for Alibaba will depend on how regulatory pressures and hardware availability evolve, but the partnership underscores both companies’ push to diversify and scale amid an intensifying AI arms race.