Alibaba AI chip unit T-Head files for Hong Kong IPO

Detailed summary

China's Alibaba Group said on Tuesday (Nov 10) its chip unit T-Head had confidentially filed for a Hong Kong initial public offering, advancing a spin-off that would give investors direct exposure to one of the group's key artificial intelligence and chip assets.

Alibaba said T-Head submitted a confidential Form A1 application on Sep 11 after the Hong Kong Stock Exchange cleared the Chinese e-commerce giant to proceed with the proposed spin-off.

The size of the deal, offering structure and Alibaba's post-listing stake have yet to be determined, the company added.

Alibaba said the spin-off would allow investors to better value T-Head and its core businesses separately while helping the chipmaker raise capital independently and strengthen ties with customers, suppliers and strategic partners.

Founded in 2018, T-Head sits at the centre of Alibaba's push to build in-house AI and computing capabilities as Chinese technology firms race to meet rising demand for AI infrastructure and reduce reliance on Nvidia's AI processors amid US export restrictions.

The listing would give investors exposure to a business that has become increasingly strategic to Alibaba's ambitions in cloud computing and artificial intelligence.

In September, the company unveiled T-Head's Zhenwu V900 AI processor, which it said delivers three times the performance of its previous-generation chip and would underpin training and inference for next-generation AI models.

In January, Chinese internet search giant Baidu's chip unit Kunlunxin also confidentially filed for a Hong Kong listing, highlighting growing investor appetite for Chinese semiconductor and AI-linked assets.

Hong Kong-listed shares of Alibaba closed 2.9 per cent lower on Tuesday and have fallen nearly 30 per cent so far this year.

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