The company is already using the chip for parts of its business, including product search and automatic translations for its e-commerce sites, as well as for advertising and personalized recommendations. Alibaba told CNBC that it has no plans to sell the chip -- it plans to use the component to power its cloud computing business instead. It could eventually lead to more cloud product options for its customers, but for now, company CTO Jeff Zhang said Alibaba plans "to empower [its] clients by providing access through [its] cloud business the advanced computing that is made possible by the chip, anytime and anywhere."

Huawei's and Alibaba's move shows Chinese tech companies' efforts to stop relying on American businesses. In Huawei's case, the US trade ban against it means the company will no longer be able to source its chips from businesses in the country, such as Intel and Qualcomm. That's why Huawei also designed its own 5G chip for mobile and why it's even developing an Android alternative.