Alibaba moves to spin off and list its T-Head AI chip unit in Hong Kong

Alibaba announced that the Hong Kong Stock Exchange will let it spin off its semiconductor subsidiary, T-Head. The Chinese e-commerce and technology company plans to run a public offering of T-Head shares in Hong Kong.

Regulatory hurdles and listing details

The proposed listing must clear approvals from both the Hong Kong exchange and the China Securities Regulatory Commission. Alibaba made a confidential filing on Sept. 11 for the move. The company has not yet shared an expected date or financial size for the offering.

The move comes as Chinese financial watchdogs tighten oversight of technology stock offerings and sector capital flows. Other local chip firms face headwinds as well. Baidu has reportedly paused the public listing of its AI chip division, Kunlunxin, while memory chip manufacturer YMTC has also delayed listing plans.

Shares of Alibaba listed in Hong Kong fell 1% on Wednesday morning following the announcement. The company’s stock has declined about 29% since the start of the year.

The domestic chip race

T-Head designs processors that compete with components from overseas suppliers such as Nvidia. Alibaba and rivals like Huawei are focusing on local hardware as U.S. export controls restrict China’s access to foreign advanced silicon.

Alibaba recently expanded its hardware portfolio. In late September, it unveiled the Zhenwu V900 AI processor. Alibaba said the component provides three times the performance of its earlier Zhenwu M890 chip, which debuted in May.

Domestic alternatives remain under intense market focus. Short seller Culper Research alleged in May that Alibaba bypassed chip curbs to acquire Nvidia silicon through third-party entities in Southeast Asia. Alibaba did not immediately comment on the claim.