Alibaba (9988) said it plans to spin off its chip unit, T-Head, for a separate listing in Hong Kong.
It has received the green light for the proposed spin-off from Hong Kong Exchanges and Clearing (0388), according to a filing on Tuesday.
While the company said the size and structure of the offering and the extent of the decrease in the company’s shareholding percentage in T-Head have not yet been finalized, the International Financing Review reported earlier that the company could raise US$2 billion (HK$15.6 billion) to US$3 billion from the share sale.
Founded in 2018, T-Head is the chip design subsidiary of the Chinese tech company, with an established research and development system and end-to-end chip development capabilities, according to its website.
In the data center sector, T-Head has built a comprehensive suite of AI-centric data center chip solutions covering everything from parallel and general-purpose computing to high-speed interconnects and data storage, the website said.
Alibaba said the proposed listing should enable investors to better assess and value its retained group business, and reflect the value of the T-Head group on its own merits.
In September, T-Head unveiled its next-generation AI chip, the Zhenwu V900, which Alibaba claimed was the most powerful AI chip in China in terms of computing performance.
It can deliver three times the performance of its predecessor, the M890, and can be scaled into clusters of up to 500,000 chips for frontier model training.
Alibaba expects the Zhenwu V900 to enter mass production and hit the market in the first quarter of 2027.
