Alibaba plans IPO for chip unit T-Head to bankroll $53B AI infrastructure push

Alibaba plans IPO for chip-arm T-Head to help bankroll ambitious AI infrastructure investments -- company to go up against Cambricon and Huawei to capture domestic accelerator market

Alibaba fancies itself a player in the Chinese AI accelerator space Chinese retail giant Alibaba is planning an initial public offering (IPO) for its chip manufacturing business, T-Head, as reported by Bloomberg. The move will initially give employees partial control of the business, although the timing of the IPO has yet to be revealed. When it happens, though, it will generate capital for Alibaba that it will be able to use to further invest in T-Head's production and design hardware. With Alibaba having previously pledged more than $53 billion on AI infrastructure and development over the next few years, it will need serious capital to meet its aims. It's not clear at this time how much of a valuation T-Head would reach, but it is one of a handful of companies in China looking to develop AI inferencing hardware to help rival international companies like Nvidia. Although Chinese firms aren't likely to be able to develop the chips necessary to handle AI training, inferencing hardware is certainly possible. Alongside Cambricon and Moore Threads, T-Head has the potential to become one of the major AI hardware suppliers in China. With its own major cloud services and AI ambitions, Alibaba is looking to position itself as one of the key players in the space that China has pledged to invest 10s of billions of dollars over the coming years. China's Amazon The parallels between Alibaba and major Western technology and retail companies are stark. Like Amazon, Alibaba is one of the world's largest retail firms for both direct-to-consumer sales and business-to-business transactions. For over 16 years, it has run a highly successful cloud computing business, too, offering e-commerce management, data processing, and data mining services. Like Amazon's more recent endeavours to develop its own chips and hardware, Alibaba has been at it for several years too. It announced its first AI accelerators in 2019 and subsequently provided rentable access via cloud platforms. In a post-ChatGPT world, both companies have also developed their own AI services, which they offer through their cloud platforms. Amazon has also invested in other AI firms like Anthropic and potentially OpenAI. Alibaba is going after the consumer space in a slightly different way, though, pushing its Qwen AI in its main mobile app in November last year, with plans to turn it into a personal assistant that anyone can access. It most recently tied in its online shopping and travel services with Qwen, expanding its capabilities. It plans to turn that into a one-stop app for AI services and features, and with its T-Head IPO, it's looking to build out the hardware development arm of its business to take the lead in domestic AI accelerator manufacturing, too. Powering the third wheel T-Head Semiconductor was founded by Alibaba in 2018 and traditionally develops RISC-V-based CPUs and integrated circuits for enterprise SSDs. However, it has also developed AI hardware and accelerated that in 2025 with a new range of AI accelerators, which some Chinese media sources claimed were able to compete with Nvidia's H20. Although those claims have yet to be tested, T-Head is making a name for itself in the chip design space and is competing in a huge market served by very few players. It falls far behind industry leaders like Huawei and Cambricon in terms of its capabilities and market reach, but with Alibaba's financial backing, its manoeuvred into a position as a third option for Chinese companies looking to adopt AI technology without falling foul of government mandates to use primarily domestic chips. Bloomberg highlights how T-Head has been aggressively recruiting visual AI and chip-making experts of late, and it's just signed a deal with China's number two wireless carrier to use its Pingtouge AI accelerators. Those chips will be used alongside those from other Chinese AI chip developers, MetX Integrated Circuits and Biren Technology, showcasing that there is serious competition within this burgeoning industry. And why not, with so much potential money on the table? Hoping for history to repeat After Alibaba completes its restructuring to provide employees with partial ownership and then moves to an IPO for T-Head, it will be hoping for a successful repeat of what happened with fellow tech companies working on IPOs in recent months. Chinese GPU manufacturer, Moore Threads, often called "China's Nvidia," completed its long-awaited IPO in December 2025, after a mere five years in operation, and secured a valuation as high as $40 billion, raising more than $1.1 billion in capital from share sales. This is occurring while the Chinese market is seemingly consolidating around major chip players. Fellow Chinese retail giant, Baidu, is also hoping to complete a successful IPO in Hong Kong for its chip design company, Kunlunxin. It's hired banks ahead of what it hopes will be upwards of $2 billion in investment for the company. Although no official announcement has been made yet, the IPO was confidently filed earlier this month. If Alibaba can replicate this kind of success with an IPO for T-Head, it will secure strong funding to expand the company's capabilities and allow it to compete more favorably with Chinese industry giants like Huawei and Cambricon, even if it may remain a smaller player for some time to come.

Alibaba Is Said to Plan IPO for AI Chipmaking Unit T-Head

Alibaba Group Holding Ltd. is preparing to list its chipmaking arm, tapping strong investor interest in the small circle of companies aspiring to compete with Nvidia Corp. in the hot AI accelerator business. As a first step, Alibaba plans to restructure the unit as a business partly owned by employees, people familiar with the matter said. The company will then explore an initial public offering, though the timing for that remains unclear, the people said, asking to remain anonymous discussing private plans. Alibaba representatives didn't respond to an email seeking comment. The company is still at the early stages of the process and it's unclear how much of a valuation T-Head could command. Debuts by rival chipmakers such as Moore Threads Technology Co. have drawn strong interest, reflecting bets that Beijing will prop up the industry as an alternative to American technology. Alibaba has long explored chip design, seeking to secure a supply of the crucial components that underpin its data centers and AWS-like cloud services. AI chips are one facet of a broader campaign to become a leading AI company that rivals the likes of OpenAI. Alibaba has been among the most aggressive investors in and advocates for AI since DeepSeek fired up the local tech industry. Chief Executive Officer Eddie Wu has pledged more than $53 billion toward infrastructure and AI development -- an outlay he's said the company could surpass over time. The company, which also operates a Netflix-like streaming service and one of China's biggest meal delivery platforms, revamped its mobile app Qwen in November as a major step into consumer-facing AI services. It plans to build the app into an all-around personal assistant by gradually integrating individual services under the Alibaba umbrella. In January, it linked its flagship online shopping and travel services to Qwen, taking its biggest step yet to build the app into its one-stop artificial intelligence platform for consumers. Read more about China's AI ambitions Alibaba Preps Big Revamp of Flagship AI App to Rival ChatGPT China's DeepSeek Preps AI Agent for End-2025 to Rival OpenAI Jack Ma Returns With a Vengeance to 'Make Alibaba Great Again' Alibaba's AI Arm Surges 34% Though Big Spending Hits Profit There're signs that T-Head is making progress. China's e-commerce leader signed a contract with the country's No. 2 wireless carrier to deploy its Pingtouge AI accelerators. The chips will go into the mobile operator's big new data center in northwestern China, alongside accelerators provided by rivals MetaX Integrated Circuits and Biren Technology Co. Alibaba's chip endeavor mirrors projects underway at major Chinese tech firms like Baidu Inc., which are exploring their own AI silicon with most advanced Nvidia chips banned from the country. The US company's AI accelerators are considered the gold standard in training cutting-edge models from OpenAI and Anthropic.

Alibaba to plan IPO for AI chipmaking unit T-Head: Report

Alibaba's US-listed shares rose 4.6% premarket after the report. As a first step, Alibaba plans to restructure the unit as a business partly owned by employees before exploring an initial public offering, though the timing remains unclear, the report said. China's Alibaba is preparing to list its chipmaking arm, T-Head, ⁠Bloomberg News reported on Thursday, citing people familiar with the matter. Alibaba's US-listed shares rose 4.6% premarket after the report. As a first step, Alibaba plans to restructure the unit as a business partly owned by employees before exploring an initial public offering, though the timing remains unclear, the report said. Reuters could not immediately verify the report. Alibaba did not immediately respond to a request for comment. The process is still at an early stage and the potential valuation of the unit remains unclear, according to the report. Founded in 2018, T-Head Semiconductor is Alibaba Group's wholly owned semiconductor chip unit, developing a range of processors from data center and artificial intelligence chips to Internet-of-Things products across the full chip design ⁠stack. 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, as it stepped up efforts to close the gap with domestic rivals in China's AI race.

What's Going On With Alibaba Stock Thursday? - Alibaba Gr Hldgs (NYSE:BABA)

Alibaba Group Holding Limited's (NYSE:BABA) stock jumped Thursday after reports it is moving toward an IPO of its in-house chip unit, T-Head, underscoring how China's tech giants are racing to unlock the value of domestic AI hardware as export controls tighten and demand for Nvidia Corp. (NASDAQ:NVDA) alternatives accelerates. Alibaba plans to start by restructuring T-Head into a business partly owned by employees, then weigh a public listing, though the timing and potential valuation remain unclear, Bloomberg reported on Thursday. T-Head, founded by Alibaba in September 2018, designs chips for computing and storage and continues to add engineering talent across areas such as visual AI and chip development. Alibaba has spent years building chip design capabilities to secure key components for its data centers and cloud business. At the same time, Alibaba has been expanding consumer-facing AI services through its Qwen app. After revamping Qwen in November to push deeper into consumer use cases, Alibaba linked its core shopping and travel services to the chatbot in January, aiming to turn it into a one-stop AI assistant that integrates services across the Alibaba ecosystem. Baidu Moves Toward Kunlunxin Spin-Off Baidu Inc. (NASDAQ:BIDU) is also advancing plans to spin off its AI chip unit, Kunlunxin, after hiring banks to prepare for a Hong Kong IPO that could raise up to $2 billion. It currently owns about 59% of Kunlunxin and expects it to remain a subsidiary following the listing. The IPO push reflects Baidu's growing role in China's effort to build domestic AI chip capabilities as U.S. export controls restrict access to advanced Nvidia processors. Baidu has laid out a multiyear chip roadmap, with the Kunlun M100 targeted for release in 2026 and the more advanced M300 planned for 2027. The chips already support data center and telecom workloads, and Kunlunxin has begun securing orders tied to China Mobile. BABA Price Action: Alibaba shares were up 5.06% at $177.20 during premarket trading on Thursday, according to Benzinga Pro data. Image via Shutterstock BABAAlibaba Group Holding Ltd $177.375.16% Overview BIDUBaidu Inc $164.901.61% NVDANVIDIA Corp $184.800.81% Market News and Data brought to you by Benzinga APIs

Alibaba shares surge after report co prepares IPO of AI chip unit as demand surges By Investing.com

Investing.com-- Alibaba Group Holdings (NYSE:BABA) is laying the groundwork for a potential listing of its chipmaking arm, seeking to capitalise on strong investor appetite for companies aiming to challenge Nvidia in the fast-growing AI accelerator market. As an initial step, Alibaba plans to restructure the unit, known as T-Head, into a standalone business with partial employee ownership, according to Bloomberg News. Shares in the company rose 4.6% in pre-market trade Thursday. Once that process is complete, the group is expected to explore an initial public offering, although the timing remains uncertain. The IPO plans are still at an early stage, and it is unclear what valuation T-Head could ultimately command. Recent debuts and funding rounds by rival Chinese chipmakers, including Moore Threads Technology, have attracted strong interest from investors, reflecting expectations that Beijing will continue to support the domestic semiconductor industry as an alternative to U.S. technology. Alibaba has been investing in chip design for years as part of a broader effort to secure supply for its data centres and cloud computing business, which operates on a scale comparable to Amazon Web Services. AI processors are a key component of that strategy, supporting the company's ambitions in artificial intelligence and reducing reliance on external suppliers. The move comes as competition intensifies in AI hardware, with a small group of firms globally seeking to develop alternatives to Nvidia's dominant accelerators. In China, those efforts have taken on added urgency amid U.S. export restrictions and a policy push to strengthen domestic capabilities.