Alibaba mulling IPO for chip unit T-Head - report

(Sharecast News) - Chinese tech giant Alibaba is considering floating its chipmaking unit, it was reported on Thursday. According to Bloomberg News, Alibaba plans to restructure the unit, called T-Head, into a standalone business with partial employee ownership.

The move would be a first step towards an initial public offering, the report added, citing unnamed sources familiar with the matter. The timing of any potential deal remains unclear, however, as does any valuation.

No further details were provided and Alibaba has yet to comment on the speculation.

But that did not stop shares in Alibaba jumping on the report. As at 1300 GMT, the stock was up 4% in pre-market trading in New York, and closed 1% higher in Hong Kong.

Wholly-owned by Alibaba, T-Head was founded in 2018. The business produces various semiconductors, from data centre to artificial intelligence chips such as the AI inference chip Hanguang 800, which Alibaba uses in its own products.

In November, Alibaba launched a major upgrade to its AI chatbot with a free, consumer-facing app based on its most advanced Qwen large language model.