Dive Brief:

• Alibaba announced a development roadmap for artificial intelligence and quantum computing as part of the company's initiative to develop disruptive technologies that will support its cloud, internet of things and other commercial applications. The company will develop its own quantum processors for cloud-accessible systems that will deliver the technology "as a utility" and develop quantumclassicial hybrid algorithms. 
• Alibaba has also established a chip subsidiary to work on embedded and customized AI chips for its cloud and IoT businesses. Next year, Alibaba is planning to launch its first self-developed AI chip to support a cloud-based IoT infrastructure. Executive Chairman Jack Ma has expressed the need for China to reduce its reliance on the foreign chip market, which is "controlled by America," reports CNN Tech. 
• Alibaba's cloud unit also announced on Wednesday a partnership to bring SAP's cloud platform and S/4HANA cloud products on Alibaba's infrastructure as a service for Chinese customers. The companies are building off a two-year working cloud partnership for enterprise solutions. 

Dive Insight:

Reports surfaced earlier this month that Alibaba was scaling back its cloud expansion in the U.S. following disappointing returns and growing tensions between the two global superpowers. Alibaba retains the second largest IaaS presence in the APAC region following Amazon Web Services. 

By making inroads with more software and platform as a service providers, such as SAP, Alibaba is opening up its potential customer base for other technology endeavors. Whether it can stick as well in the American market going forward, however, remains to be seen. 

Escalating tariffs between the U.S. and China may negatively impact cloud computing and force a shuffle in supply chains and trade partnerships. 

While Alibaba is trying to reduce its dependence on the American chip market, the Chinese government is walking back on its intensive plan to establish AI leadership and calling for a "borderless approach" to AI research and development, Bloomberg reports. 

But national security implications tied to artificial intelligence and quantum computing make international cooperation, especially between governments, a precarious field. China is steadily gaining an edge in both fields, no thanks to a nationally directed technology plan and heavy government funding in these areas.