The Chinese eCommerce giant Alibaba Group Holding Ltd, at an event in Hangzhou, China, on Wednesday, reportedly said it will initiate a chip subsidiary dedicated to developing and launching its first AI inference chip in the second half of 2019, according to Reuters.

The Alibaba AI chip will have the capability to power Alibaba’s cloud technology and IoT devices, and could also be used for autonomous cars, smart cities, and logistics.

Alibaba’s zealous drive to develop its own semiconductors follows the Chinese government policy of raising the quality of domestically-manufactured chips and thereby propels technology of domestic industries, transport, and AI healthcare systems.

This follows Alibaba’s April acquisition of C-Sky Microsystems, a Chinese microchip maker in Hangzhou. Moreover, in response to the US-China trade war, Jack Ma reportedly said that China needs to control “core technology” such as chips so that it can evade over-reliance on US imports.