SHANGHAI—Chinese tech giant Alibaba Group Holding Ltd. said on Tuesday it has developed a processor that will be used to power servers in its data centers. The development marks the latest foray into semiconductors for the company, mirroring moves from other global cloud computing players while also dovetailing with the Chinese government’s priorities to boost the nation’s chip sector. Developed by Alibaba’s in-house semiconductor unit T-Head, the chip—the Yitian 710—is based on architecture from UK-based Arm Ltd., and will not be available for commercial use outside of Alibaba. Alibaba is the largest cloud computing provider in China by market share and the third-largest globally, according to research firm Gartner. Its rivals in the sector have also released server chips of their own. Huawei Technologies Co. Ltd. and Amazon.com Inc. rely on their respective Kunpeng and Graviton chips to power their cloud computing infrastructure. Alibaba also said it has developed a …