The U.S. has a slight lead over China in the race to develop universal business and personal applications for artificial intelligence (AI), says Alibaba Group chairman Joe Tsai.

The reason is limited access to computer chips based on government restrictions, Tsai says in a new podcast interview with Nicolai Tangen, chief executive of Norway’s Norges Bank Investment Management unit, which invested $4 billion over time in Alibaba.

China is “probably two years behind the top [large language] models,” with the U.S.’s curbs on exporting high-end chips to China part of the reason the country is behind in the AI space, based on a synopsis of the podcast on Yahoo Finance. But Alibaba has “made some efforts” in manufacturing high-end graphics processing units (GPUs). It also sources chips from other players, without giving further details, according to the transcript.

Alibaba owns the world’s two largest online marketplaces by gross merchandise value (GMV), Taobao and Tmall. Taobao ranks No. 1 in the Global Online Marketplaces Database, Digital Commerce 360’s ranking of the largest such marketplaces by GMV. Tmall ranks No. 2. Both operate in China.

AI and Alibaba investments

Alibaba Group has been investing in a better customer experience. In doing so, its goal has been to drive sales across its international retail and B2B ecommerce sites. That strategy produced a 44% year-over-year rise to $4.02 billion in its international division’s sales for its fiscal third quarter ended Dec.31.

But those investments led to a 388% drop in earnings before taxes and amortization costs to a net EBITA loss of $433 million for the Alibaba International Digital Commerce group, Alibaba said. They also contributed to Alibaba Group’s 77% drop in Q3 net income to $1.51 billion.

But now, Alibaba is looking to deliver better results, according to the podcast. A big emphasis is on growing its business in the U.S.

“Speaking of U.S.-China specifically, if you look at Alibaba, we do so much business on behalf of U.S. companies,” he said in a transcript on BusinessToday.com. “We sold over $60 billion of American products to Chinese consumers annually. “

But doing business online in the U.S. is not without challenges.

“Just generally being a Chinese company in the U.S., we must be very careful,” he said. “For example, we do not have much of a consumer-facing business in the United States and that is because [there are] concerns about data privacy, cyber security and things like that. These are some of the issues that we will have to navigate in the future.”

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Sign up for a complimentary subscription to Digital Commerce 360 B2B News, published 4x/week. It covers technology and business trends in the growing B2B ecommerce industry. Contact Mark Brohan, senior vice president of B2B and Market Research, at [email protected]. Follow him on Twitter @markbrohan. Follow us on LinkedIn, Twitter, Facebook and YouTube.