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
(Image credit: Alibaba)
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
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