To me at least "not good after all" means their current latest hardware has issues which means it cannot replace Nvidia GPUs yet. This is a hard problem so not getting there yet doesn't imply bad engineering just a reflection of the scale of the challenge! It also doesn't imply that if this generation is a miss following generations couldn't be large win. Indeed I think it would be very foolish to assume that Alibaba or other Chinese firms cannot build devices that can challenge Nvidia here on the basis of current generation not being up to it yet. As you say they have a large market that's willing to wait for them to become good.

Plus it may not be true, this new Alibaba chip could turn out to be brilliant.