Alibaba adds Nvidia’s Physical AI to its cloud

Ken Metral

24 Sep 2025 — 2 min read

Credit: Nvidia, Inc.

Nvidia’s global AI expansion is picking up speed. Days after announcing a $5 billion stake in Intel and committing $100 billion to OpenAI, the GPU giant has struck a major partnership with China’s Alibaba.

On Wednesday, Alibaba revealed that it will integrate Nvidia’s suite of AI development tools into its Cloud Platform for AI. The offering will include Nvidia’s Physical AI software stack, designed to build 3D replicas of real-world environments. These digital twins can generate synthetic data, which in turn helps train AI models for robotics, autonomous driving, and connected spaces such as factories and warehouses.

Financial details of the deal were not disclosed, but the collaboration underscores the increasing interdependence between hardware leaders and cloud service providers in the AI race. For Nvidia, the move extends its dominance in supplying the world’s most advanced AI chips, while for Alibaba, it marks another step in its effort to evolve beyond e-commerce and become a global AI powerhouse.

Alibaba’s Expanding AI Ambitions

Alibaba confirmed that it is boosting AI spending beyond its previously announced $50 billion budget. Part of that investment will go toward expanding its international cloud footprint. The company plans to open its first data centers in Brazil, France, and the Netherlands, while continuing to grow its infrastructure in other regions. Currently, Alibaba Cloud operates 91 data centers across 29 regions worldwide.

At the same event, Alibaba also introduced Qwen 3-Max, the latest model in its Qwen family of large language models. With 1 trillion parameters, the model is described as the company’s “largest and most capable to date,” optimized for tasks like coding and agent-driven applications.

Global AI Power Plays

The Nvidia–Alibaba partnership arrives at a pivotal moment. As AI competition intensifies worldwide, collaborations between chipmakers and cloud providers are becoming essential for both technological progress and market expansion. Nvidia gains another high-profile distribution channel for its AI tools in one of the world’s largest digital markets, while Alibaba strengthens its arsenal with cutting-edge infrastructure to support robotics, autonomous systems, and generative AI development.

This alignment signals not just a deal between two tech giants, but also a broader shift: AI development is increasingly about building ecosystems where data, compute, and deployment environments converge. With Nvidia’s Physical AI tools and Alibaba’s cloud reach, that convergence is about to accelerate.

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