According to sources from The Information, Alibaba and Baidu have begun using internally designed chips to train their AI models. The move reflects a major shift in China’s AI and technology landscape, reducing reliance on the US for powerful processors, particularly those from Nvidia.
The report has revealed that Alibaba begun using its own chips for smaller AI models earlier this year. Meanwhile, Baidu has started experimenting with training new versions of its Ernie AI model using its Kunlun P800 chip.
“The competition has undeniably arrived … We’ll continue to work to earn the trust and support of mainstream developers everywhere.”
-Nvidia spokesperson.
Beijing has been encouraging tech companies to use home-grown technology and reduce dependence on US hardware post the DeepSeek AI boom, aiming to strengthen its supply chain resilience and address national security concerns.
For this article, we selected AI stocks by going through news articles, stock analysis, and press releases. These stocks are also popular among hedge funds. The hedge fund data is as of Q2 2025.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
10. BigBear.ai Holdings, Inc. (NYSE:BBAI)
Number of Hedge Fund Holders: 20
BigBear.ai Holdings, Inc. (NYSE:BBAI) ) is one of the 10 AI Stocks in the Spotlight for Investors. On September 11, the company announced deployments of Enhanced Passenger Processing (EPP) at the Nashville International Airport (BNA) International Arrivals Facility, owned and operated by Metropolitan Nashville Airport Authority (MNAA).
With the help of veriScan, BigBear.ai’s biometric technology supporting EPP, US citizens will be able to move through customs without showing their physical passports. This will not only improve their traveler experience but also enhance operational efficiency.
BNA is one of the many major airports and ports of entry implementing EPP to streamline international arrivals. The solution helps to reduce average processing times, ease congestion during peak arrival periods, and improve efficiency and passenger satisfaction.
“BigBear.ai’s advanced identity verification tools streamline passenger processing while giving officers real-time insights to make faster, more informed decisions. We are proud to partner with the Metropolitan Nashville Airport Authority and U.S. Customs and Border Protection (CBP) to deliver AI-driven solutions that both strengthen security and transform the arrival experience for travelers.”
-Kevin McAleenan, CEO of BigBear.ai.
BigBear.ai Holdings, Inc. (NYSE:BBAI) is an artificial intelligence specialist that provides decision intelligence solutions for national security, digital identity, supply chain and logistics, enterprise operations, and manned-unmanned teaming in autonomous systems.
9. C3.ai, Inc. (NYSE:AI)
Number of Hedge Fund Holders: 30
C3.ai, Inc. (NYSE:AI) is one of the 10 AI Stocks in the Spotlight for Investors. On September 12, UBS analyst Radi Sultan raised the price target on the stock to $17.00 (from $16.00) while maintaining a Neutral rating.
The firm said that it “remains on the sidelines” on the AI software provider due to limited visibility into the range of outcomes for FY27 growth. The firm projects an estimated 16.5% growth while investor estimates range from no growth to mid-20s growth.
Discussing the company’s Q1 weakness, the firm noted that it was largely due to execution failures around several large deals instead of broad-based customer weakness.
It further noted that even though the FY26 revs framework of $290-300m incorporates conservatism, it is keeping its estimate unchanged due to uncertainties such as a big Q1 miss, a new CEO, and GTM changes.
The firm’s key concern remains that the new CFO is yet to finalize his overhaul plan which may create disruption over the next few quarters.
“We remain on the sidelines following our conversation as we still don’t have great visibility into the range of outcomes for FY27 growth (we’re at ~16.5% but we’ve heard investors suggesting anywhere from no growth to mid-20s growth). The company acknowledged Q1 weakness but did characterize the significant miss as more a lack of execution around a few large deals vs broad-based weakness across the customer base (with a good mix of deals slipping vs deals that were lost). While the FY26 revs framework of $290-300m does seem to be baking in conservatism, there are enough moving pieces (big Q1 miss, new CEO, GTM changes and new CCO) that we aren’t yet ready to underwrite upside and leave our FY26 revs estimate of $299m unchanged. Our biggest takeaway was that the new CEO hasn’t yet finalized his overhaul plan which could potentially cause significant disruption and last several quarters. In our view this is key in determining where 2H26 and FY27 will ultimately land and even with investor positioning already negative we remain on the sidelines pending additional visibility.”
C3.ai, Inc. (NYSE:AI) is an enterprise artificial intelligence (AI) software company involved in building and operating enterprise-scale AI applications and accelerating digital transformation.
