Alibaba scraps plan to spin off cloud intelligence unit

Alibaba scraps plan to spin off cloud intelligence unit
Financial Expert Stock Markets 16 November 2023

Alibaba (NYSE:BABA) has decided not to go ahead with a full spin-off of its key cloud unit, citing the impact of enhanced U.S. controls on exports of advanced computing chips and semiconductor manufacturing equipment to China.

“We believe that these new restrictions may materially and adversely affect Cloud Intelligence Group’s ability to offer products and services and to perform under existing contracts, thereby negatively affecting our results of operations and financial condition,” the Chinese e-commerce giant said in a statement.

U.S.-listed shares in Alibaba tumbled in premarket trading.

The move threatens to rupture a major pillar of Alibaba's long-stated plan to split into six separate entities in a bid to appease regulators in Beijing.

The cloud unit has also been at the heart of the firm’s attempts to develop a generative artificial intelligence, following a boom in the sector this year. Alibaba had earlier this month rolled out a major update for its Tongyi Qianwen AI model.

Thursday's announcement comes as the company reported second-quarter adjusted earnings before interest, tax, depreciation and amortization of 49.24 billion yuan, while revenue rose by 8.5% on an annual basis to 224.79B yuan.

Previous articles

This week in EVs: Price hikes and pay bumps

27 November 2023

Tesla TSLA increases Model Y price in China

Electric vehicle (EV) giant, Tesla Inc (NASDAQ:TSLA) announced Tuesday that it has increased the price of its Model Y Long Range Dual Motor All-W...

5 big analyst AI moves: AI demand to keep tech rally intact; C3 upgraded

27 November 2023

UBS says AI demand to fuel tech rally

Tech stocks are likely to continue rallying going forward, according to UBS investment strategists. More precisely, the Swiss investment bank sees chip...

Top 5 things to watch in markets in the week ahead 27.10.2023

27 November 2023

With investors on tenterhooks over when global interest rates might start to fall, upcoming inflation data this week will be in focus. OPEC+ meets to discuss oil output cuts and data from China wil...

U.S. futures inch mostly up ahead of shortened trading day - what's moving markets

25 November 2023

U.S. futures edged mainly into the green ahead of a truncated trading day. American shoppers will be on the hunt for deals this Black Friday as retail companies warn that inflation-squeezed consume...

Investors are clamoring for OpenAI, Microsoft stock amid Sam Altman drama

25 November 2023

The recent dramatic firing and re-hiring of OpenAI CEO Sam Altman has led to a massive increase in would-be investors in the AI software company behind ChatGPT. An analysis from Venture Smarter sho...