By Hamza Faisal
Alibaba is preparing to spin off and list its chip design unit T-Head in Hong Kong next year, aiming to raise $2 billion to $3 billion, according to reports published on Monday. The move would turn one of China's most strategically important AI chip businesses into a standalone public company — and it comes as Chinese chipmakers rush to tap Hong Kong's red-hot IPO market.
Reuters and the International Financing Review (IFR) both reported the plan, citing people familiar with the matter. The listing would raise roughly HK$15.6 billion to HK$23.4 billion, and reports say the unit has confidentially filed for the offering. Alibaba has not publicly confirmed the listing.
A $2–3 Billion Listing in a Hot Market
T-Head, also known by its Chinese name Pingtouge, was founded in September 2018 and is Alibaba's wholly owned semiconductor arm. It designs chips for data centres and AI workloads, and its products are already used across Alibaba's own businesses, including Alibaba Cloud, Tmall and Alimama.
The reported listing follows a January Bloomberg report that Alibaba planned to restructure T-Head into a standalone business partly owned by its employees, as a first step toward an IPO. Analysts at J.P. Morgan estimated then that the unit could be worth between $25 billion and $62 billion.
Hong Kong has become the venue of choice for Chinese AI chipmakers. Biren Technology's January listing jumped 76 percent on its first day of trading, and rivals MetaX and Moore Threads have also gone public there. On Tuesday, two more Chinese chip firms made their Hong Kong debuts after raising a combined HK$2.4 billion.
The Chip Behind the Listing
T-Head's flagship product is the Zhenwu V900, an AI chip unveiled in September that Alibaba claimed was the most powerful AI chip developed in China by computing performance. The company says the chip can handle training and inference for large models with trillions of parameters, and it is scheduled to enter mass production in the first quarter of 2027.
The unit's portfolio also includes the Hanguang 800 AI inference chip and the Yitian 710 server processor. T-Head has begun selling its chips outside Alibaba as well: China Unicom, the country's second-largest wireless carrier, has signed a contract to deploy Pingtouge AI accelerators in a large new data centre in northwestern China.
The spinoff fits Alibaba chief executive Eddie Wu's push to put chips at the centre of the company's AI strategy. Wu has pledged more than $53 billion toward AI infrastructure, and Alibaba's cloud division is now one of the biggest buyers of AI accelerators in China.
China's AI Chip IPO Wave
Alibaba is not the only Chinese tech giant looking to list a chip unit. Baidu's Kunlun chip division confidentially filed for a Hong Kong IPO earlier this year, in a deal media reports said could raise up to $2 billion. The two listings would test investor appetite for domestic alternatives to Nvidia, whose most advanced chips cannot be sold in China under US export controls.
For Alibaba, a successful listing would raise fresh capital for chip development while Chinese demand for homegrown AI hardware surges, and give the unit listed shares to hire engineers and strike deals without competing for resources inside the wider group.
If the reported timetable holds, T-Head would join the Hong Kong market in 2027 in one of the year's largest technology listings. How investors price it will depend on how quickly the Zhenwu V900 moves from launch to volume sales — and on whether China's AI chip boom keeps its momentum.
