Alibaba Group is preparing to spin off its long‑shelved chip unit, Pingtouge, and to explore a public listing, a move that sent Alibaba’s US shares sharply higher on Jan. 22. The stock opened up more than 4.6% and briefly rose as much as 7.4% intraday, lifting market value by roughly $29.7 billion before settling at a gain of just over 5% by the close. Alibaba declined to comment on the plans.
The reported plan would first reorganise Pingtouge’s chip businesses into a separate entity with some employee share ownership and then test the waters for an initial public offering. The initiative remains at an early, exploratory stage: there is no firm timetable, and a valuation has not been disclosed. The reorganisation reflects a broader intention to monetise a capability that Alibaba has quietly developed for years.
Pingtouge, founded inside Alibaba in 2018 from an acquired design team and the group’s research arm, focuses on AI accelerators and RISC‑V architecture. The unit’s public technical profile has grown recently: its PPU GPU‑style accelerator was shown with 96GB of HBM2e memory, a 700GB/s chip‑to‑chip interconnect, PCIe 5.0×16 I/O and a 400W power envelope—specifications the state broadcaster presented as competitive with Nvidia’s H20 and surpassing some domestic peers. Pingtouge also supplies general‑purpose CPUs, enterprise SSD controllers and an IoT family that has already shipped at scale to consumer devices.
The move comes amid a rush of Chinese AI‑chip listings. Baidu’s Kunlun accelerator has already submitted a confidential IPO filing in Hong Kong, while several domestic GPU and accelerator firms have pursued listings in mainland and Hong Kong markets—some debuting with dramatic gains. Investors are chasing exposure to companies that could become domestic substitutes for US‑supplied accelerators, and the market has rewarded high‑profile listings with generous valuations.
For Alibaba, spinning off Pingtouge would plug a strategic hole in its AI stack. The group has made massive commitments to cloud and AI infrastructure—promising tens of billions of dollars of fresh investment in the next three years—and in‑house accelerators would secure supply for its cloud business and proprietary AI deployments. Owning a competitive domestic accelerator narrows Alibaba’s dependence on foreign suppliers at a time of heightened export controls and geopolitical friction.
Yet important risks remain. Pingtouge will still face the capital‑intensive challenge of scaling chip production and packaging in an environment where cutting‑edge fabs and advanced packaging are constrained. Customer adoption beyond Alibaba, margin pressure, potential regulatory scrutiny of large tech spin‑offs and the macro volatility that has characterised recent AI IPOs could all complicate a listing.
If Alibaba proceeds, the Pingtouge IPO will be a significant signal for China’s semiconductor ambitions: it would demonstrate that a major internet platform sees a standalone chip business as both strategically and commercially viable. The listing would likely accelerate consolidation and capital flows into domestic AI hardware, while also inviting closer scrutiny from investors and regulators at home and abroad.