Alibaba advances Hong Kong IPO plans for chip subsidiary T-Head

Alibaba (09988.HK) announced plans to spin off its chip subsidiary T-Head for a Hong Kong IPO, with a confidential filing made in September. T-Head, which produces AI chips and other semiconductor products, aims to list H-shares on the Hong Kong Stock Exchange. Alibaba's U.S.-listed shares rose to around $105.26 in premarket trading. The spin-off is expected to unlock independent valuation for T-Head's assets and enhance its commercial profile.

Alibaba (BABA) received approval to spin off its AI chip unit, T-Head, in Hong Kong. T-Head, fully owned by Alibaba, filed its listing application on Sept. 11, but the offering's scale and format remain undecided. The spin-off aims to provide investors with a way to value T-Head separately and attract those interested in the chip business. Alibaba recently unveiled the Zhenwu V900 AI chip, targeting mass production in Q1 2027, and has over 650 customers for its Zhenwu chips.

Alibaba's in-house chip design unit, T-Head, has filed for a Hong Kong listing. The move, cleared by the exchange, aims to spin off the data-centre chip business. T-Head will remain a subsidiary of Alibaba post-listing, with the size and structure of the offering not yet finalized.

Alibaba's T-Head, which designs chips, has filed to list in Hong Kong, Bloomberg reports.

Alibaba plans to spin off its AI chip unit, T-Head, and list it in Hong Kong in 2027, raising $2B-$3B while retaining majority control. T-Head designs AI chips, including the Zhenwu V900, with annualized revenue exceeding RMB 10B. Analysts estimate T-Head's standalone valuation at $25B-$62B.

Aletheia Capital raised Alibaba's (BABA) price target to $190, citing AI cloud strength and expected Q3 2026 earnings growth. The stock is up 7.8% in a week. Other analysts also raised targets, noting AI and cloud services performance. Alibaba's market cap is $272B, P/E 25.5.