Investing.com -- Alibaba and China Telecom announced Tuesday the launch of a data center in southern China powered by Alibaba's self-developed Zhenwu AI semiconductors.

The facility, located in Shaoguan in Guangdong province, will feature 10,000 of Alibaba's Zhenwu chips designed for AI training and inferencing. The data center can support AI models with hundreds of billions of parameters and is expected to expand to a scale of 100,000 chips.

Alibaba designs chips through its T-head unit. The Hangzhou-based company is one of China's largest cloud computing players and sells AI models through its cloud computing division, which has been among its fastest-growing businesses in recent quarters.

China Telecom and Alibaba said the computing cluster can be used in industries from healthcare to advanced materials.

The launch comes as Chinese firms accelerate efforts to develop domestic chip alternatives. The U.S. has restricted China's access to key semiconductor technology, including AI chips from Nvidia.

Last month, a computing cluster built with Huawei's Ascend 910C AI chips went online in China.