Alibaba pushes for Hong Kong listing of AI chip unit T-Head

Alibaba, China's largest e-commerce company, is pursuing a Hong Kong stock exchange listing for T-Head, its AI chip design subsidiary. The move is seen as an effort to raise funds for in-house AI chip development and data center expansion amid US export controls that have cut off supplies of Nvidia's advanced chips to China.

According to Bloomberg and other outlets, Alibaba disclosed Tuesday (local time) that T-Head had filed an initial public offering application with the Hong Kong Stock Exchange on Sept. 11. The specific offering size and listing structure were not disclosed.

T-Head is a wholly owned semiconductor design subsidiary of Alibaba that supplies chips to data centers in China. It is expected to remain an Alibaba subsidiary after the listing.

Alibaba said it hopes the listing will allow investors to assess T-Head's value separately from the group's other businesses. The move would help attract investors focused on the semiconductor sector while also enabling T-Head to raise capital directly from equity and bond markets and strengthen its access to bank financing, the company said.

T-Head is one of China's leading companies developing AI accelerators to replace Nvidia's products. With US export controls blocking Nvidia's most advanced AI chips from entering China, T-Head has joined Huawei Technologies, Hygon Information Technology and others in driving China's push for semiconductor self-sufficiency.

In September, T-Head unveiled its in-house AI accelerator, the Zhenwo V900, which the company described as the most powerful AI chip in China. The product delivers three times the performance of its predecessor and can link up to 500,000 units in a single cluster to train advanced AI models, the company said.

Alibaba has said it has already delivered 560,000 chips from the Zhenwo product line, with more than 400 external customers adopting the processors. T-Head plans to scale up supply to meet demand from large-scale data center buildouts expected across China over the coming years.

The race among Chinese tech giants to list their AI chip units is also heating up. Baidu's AI chip subsidiary Kunlun Xin is reportedly planning an IPO worth around $2 billion next year.

Bloomberg reported that the number of IPOs on the Hong Kong stock exchange this year has reached its highest level in six years, but cooling market sentiment has pushed some major listings into next year. Against that backdrop, T-Head's listing bid is expected to serve as a test of investor appetite and growth expectations for China's AI chip industry.