Alibaba to spin off AI chip unit T-Head in Hong Kong IPO

Alibaba wants to list its semiconductor arm T-Head in Hong Kong, with the offering targeted for 2027. The e-commerce giant plans to raise between US$2 billion and US$3 billion — roughly HK$15.6 billion to HK$23.4 billion — while keeping majority control once the shares trade. T-Head, also known as Pingtouge, designs chips for AI workloads, including server CPUs and RISC-V processors.

This is not a startup pitching a dream. T-Head has shipped more than 470,000 chips, according to figures cited by CEO Eddie Wu, and its annualized revenue passed RMB 10 billion as of early 2026. The unit was founded in 2018 by merging C-SKY Microsystems with the chip team from DAMO Academy, Alibaba's research arm.

The product story centers on the Zhenwu V900, an AI chip unveiled in September 2026 that the company bills as the most powerful in China. It reportedly delivers three times the computing performance of its predecessor, the M890, and supports clusters of up to 500,000 chips working together. Mass production is slated for the first quarter of 2027 — the same window as the IPO.

The exit route has been simmering for a while. Talk of a spin-off dates back to at least January 2026, when Bloomberg reported plans to restructure T-Head into a partly employee-owned entity. Analysts see a standalone valuation landing anywhere from US$25 billion to US$62 billion.

Keeping control while spinning off a division lets Alibaba unlock value from a fast-growing business without surrendering strategic direction, and gives T-Head a public currency for hiring and deals. But Alibaba is expected to remain both controlling owner and major customer, raising questions about pricing and priorities between the two. Next up: formal filing details, the final size of the raise, the shape of the employee ownership structure, and whether V900 production holds its schedule.