Alibaba Group Holding (NYSE:BABA) shares climbed after a report said the group is preparing the ground for a possible public listing of its semiconductor unit, aiming to tap strong investor demand for challengers to Nvidia in the rapidly expanding AI accelerator market.
According to Bloomberg News, Alibaba’s first step would be to reorganize the chip business, known as T-Head, into an independent entity that would include partial employee ownership. Once that restructuring is completed, the group is expected to assess an initial public offering, though no timetable has been set.
Alibaba shares rose about 4.6% in pre-market trading on Thursday following the report.
Any IPO remains at an early and exploratory stage, and there is no clarity yet on the valuation T-Head might achieve. Investor interest in Chinese chipmakers has been robust, however, with recent listings and fundraising rounds by peers such as Moore Threads Technology highlighting expectations that Beijing will continue backing domestic semiconductor development as an alternative to U.S. technology.
Alibaba has invested in chip design for several years as part of a wider strategy to secure key components for its data centres and cloud operations, which operate at a scale comparable to Amazon Web Services. Proprietary AI chips are central to those plans, supporting the group’s artificial intelligence ambitions while reducing dependence on third-party suppliers.
The reported move comes as competition intensifies globally in AI hardware, with only a limited number of companies attempting to develop viable alternatives to Nvidia’s dominant accelerators. In China, these efforts have become increasingly important amid U.S. export controls and a broader policy drive to strengthen homegrown semiconductor capabilities.