Alibaba Group Holding Ltd (阿里巴巴) plans to split its US$220 billion empire into six main units that would individually raise funds and explore initial public offerings (IPOs), in the biggest overhaul of China’s e-commerce leader since its inception more than two decades earlier.
The move frees up the Chinese company’s main divisions from e-commerce and media to the cloud to operate with far more autonomy, laying the foundation for spin-offs and market debuts. Its shares climbed more than 4 percent in premarket trading in New York.
The shift to a holding company structure is rare for major Chinese tech companies. It marks a departure from the Internet company’s traditional preference for keeping most of its operations under one roof, running everything from supermarkets to datacenters under the main Alibaba umbrella.
Photo: Bloomberg
It is also a strong signal that Alibaba is ready to tap investors and public markets, after Chinese President Xi Jinping’s (習近平) administration’s clampdown on Internet spheres wiped out more than US$500 billion of its value.
“The news follows Beijing’s vow to support private sector. If China wants to achieve its 5 percent GDP growth target, they need to support companies like Alibaba,” said Steven Leung (梁偉源), executive director at UOB Kay Hian Ltd (大華繼顯控股) in Hong Kong.
Alibaba’s announcement yesterday coincided with the return of its billionaire cofounder Jack Ma (馬雲) to China after more than a year abroad.
Group chief executive officer Daniel Zhang (張勇) is to head up the cloud intelligence division, a nod to the growing role that artificial intelligence would play in the e-commerce leader’s portfolio in the long run.
Former international retail chief Jiang Fan (蔣凡) is to head up the digital business unit, while longtime executive Trudy Dai (戴珊) takes up the main Taobao Tmall (淘寶天貓) online shopping division. Its other divisions include local services such as meal delivery, the Cainiao (菜鳥) logistics group and digital media and entertainment.
Despite the creation of a half-dozen business lines, Alibaba yesterday reaffirmed the cost-cutting it had pledged to shore up the bottom line.
That was a conservative shift for a tech conglomerate that once spent aggressively to dominate swaths of the economy, reflecting the dissipation of growth since Xi’s crackdown ensued in 2020.
Beijing has cracked down on the country’s tech giants over the past two years, forcing fundamental changes in the business models of companies including Alibaba.
The e-commerce pioneer is also navigating increasingly tough competition from archrival JD.com Inc (京東), as well as up-and-comers such as PDD Holdings Inc (拼多多) and ByteDance Ltd (字節跳動).
“At 24 years of age, Alibaba is welcoming a new opportunity for growth,” Zhang said in a statement. “The market is the best litmus test, and each business group and company can pursue independent fundraising and IPOs when they are ready.”
SECOND-RATE: Models distilled from US products do not perform the same as the original and undo measures that ensure the systems are neutral, the US’ cable said The US Department of State has ordered a global push to bring attention to what it said are widespread efforts by Chinese companies, including artificial intelligence (AI) start-up DeepSeek (深度求索), to steal intellectual property from US AI labs, according to a diplomatic cable. The cable, dated Friday and sent to diplomatic and consular posts around the world, instructs diplomatic staff to speak to their foreign counterparts about “concerns over adversaries’ extraction and distillation of US AI models.” Distillation is the process of training smaller AI models using output from larger, more expensive ones to lower the costs of training a powerful new
Shares of Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) have repeatedly hit new highs, but an equity analyst said the stock’s valuation remains within a reasonable range and any pullback would likely be technical. The contract chipmaker’s historical price-to-earnings (P/E) ratio has ranged between 20 and 30, Cathay Futures Consultant Co (國泰證期) analyst Tsai Ming-han (蔡明翰) told Central News Agency. With market consensus projecting that TSMC would post earnings per share of about NT$100 (US$3.17) this year, supported by strong global demand for artificial intelligence (AI) applications, and the stock currently trading at a P/E ratio of below 25, Tsai said the valuation
The artificial intelligence (AI) boom has triggered a seismic reshuffling of global equity markets, with Taiwan and South Korea muscling past European nations one by one. With its stock market now valued at nearly US$4.3 trillion, Taiwan surpassed the UK, Europe’s biggest market, earlier this month, data compiled by Bloomberg showed. South Korea is about US$140 billion away from doing the same. The tech-heavy Asian markets have shot past Germany and France in the past seven months. The shift is largely down to massive gains in shares of three companies that provide essential hardware for AI: Taiwan Semiconductor Manufacturing Co (TSMC, 台積電),
The US Department of Commerce last week ordered multiple chip equipment companies to halt shipments of certain tools to China’s second-largest chipmaker, Hua Hong Semiconductor Ltd (華虹半導體), its latest action to slow the country’s development of advanced chips, two people familiar with the matter said. The department sent letters to at least a handful of companies informing them of restrictions on tools and other materials destined for two Hua Hong facilities US officials believe make China’s most sophisticated chips, the people said. Top US chip equipment companies Lam Research Corp, Applied Materials Inc and KLA Corp, each of which has significant
RSS