Alibaba, the enormous Chinese e-commerce company, lost $20 billion in market value when it declared that it would not be listing and spinning out its cloud computing division.
Citing U.S. export limitations on advanced semiconductors, the business, which competes with the internet behemoth Amazon in the United States, announced on Thursday that it will not move forward with the spinoff of its Cloud Intelligence Group.
The restrictions, according to Alibaba, have "created uncertainties for the prospects of Cloud Intelligence Group," a company that rivals Google Cloud Platform, Microsoft Azure, and Amazon Web Services.
“Instead, we will focus on developing a sustainable growth model based on emerging AI-driven demand for networked and highly scaled cloud computing services,” Alibaba CEO Joe Tsai said on the company’s investor call Thursday.
Alibaba's market capitalization was 1.65 trillion Hong Kong dollars ($211.6 billion) as of Thursday's market close in Hong Kong. Alibaba's market capitalization fell to $191 billion, or 1.49 trillion Hong Kong dollars, on Friday.
Based on FactSet statistics, that amounts to a $21.1 billion drop in market capitalization.
Alibaba's Hong Kong-listed stock has dropped about 15% so far this year, outpacing the 11.2% decrease of the Hang Seng index as a whole.
Investors had anticipated a higher valuation from a spun-off company for Alibaba's cloud computing division. According to Reuters, analysts projected Cloud Intelligence Group's value in March to be between $41 billion and $60 billion.
However, given the volume of data the company maintains and controls, market observers have cautioned that the listing could draw attention from regulators in China and abroad.
The development demonstrates how Alibaba, one of the biggest tech firms in China, has emerged as the most recent enterprise to become entangled in the intense geopolitical tensions that exist between the United States and China.
Alibaba is making significant investments in artificial intelligence in an effort to stay up with its American competitors, which include Microsoft, Alphabet's Google, Amazon, Apple, Meta, and the Microsoft-backed startup OpenAI.
The company has long included artificial intelligence (AI) into its offerings, using it to create marketing content for its 1688, Taobao, and Tmall e-commerce platforms, analyse data in industrial settings, and customise product recommendations for customers.
Alibaba debuted a new iteration of its AI model in October, competing with models of a similar nature from Amazon and Microsoft, two of the biggest IT companies in the United States.
This large language model is known as Tongyi Qianwen 2.0 (LLM). A large-scale machine learning model, or LLM, serves as the foundation for generative AI programmes like OpenAI's ChatGPT. Tongyi Qianwen 2.0, which debuted in April, is a "substantial upgrade from its predecessor," according to Alibaba.
(Source:www.cnbc.com)
Citing U.S. export limitations on advanced semiconductors, the business, which competes with the internet behemoth Amazon in the United States, announced on Thursday that it will not move forward with the spinoff of its Cloud Intelligence Group.
The restrictions, according to Alibaba, have "created uncertainties for the prospects of Cloud Intelligence Group," a company that rivals Google Cloud Platform, Microsoft Azure, and Amazon Web Services.
“Instead, we will focus on developing a sustainable growth model based on emerging AI-driven demand for networked and highly scaled cloud computing services,” Alibaba CEO Joe Tsai said on the company’s investor call Thursday.
Alibaba's market capitalization was 1.65 trillion Hong Kong dollars ($211.6 billion) as of Thursday's market close in Hong Kong. Alibaba's market capitalization fell to $191 billion, or 1.49 trillion Hong Kong dollars, on Friday.
Based on FactSet statistics, that amounts to a $21.1 billion drop in market capitalization.
Alibaba's Hong Kong-listed stock has dropped about 15% so far this year, outpacing the 11.2% decrease of the Hang Seng index as a whole.
Investors had anticipated a higher valuation from a spun-off company for Alibaba's cloud computing division. According to Reuters, analysts projected Cloud Intelligence Group's value in March to be between $41 billion and $60 billion.
However, given the volume of data the company maintains and controls, market observers have cautioned that the listing could draw attention from regulators in China and abroad.
The development demonstrates how Alibaba, one of the biggest tech firms in China, has emerged as the most recent enterprise to become entangled in the intense geopolitical tensions that exist between the United States and China.
Alibaba is making significant investments in artificial intelligence in an effort to stay up with its American competitors, which include Microsoft, Alphabet's Google, Amazon, Apple, Meta, and the Microsoft-backed startup OpenAI.
The company has long included artificial intelligence (AI) into its offerings, using it to create marketing content for its 1688, Taobao, and Tmall e-commerce platforms, analyse data in industrial settings, and customise product recommendations for customers.
Alibaba debuted a new iteration of its AI model in October, competing with models of a similar nature from Amazon and Microsoft, two of the biggest IT companies in the United States.
This large language model is known as Tongyi Qianwen 2.0 (LLM). A large-scale machine learning model, or LLM, serves as the foundation for generative AI programmes like OpenAI's ChatGPT. Tongyi Qianwen 2.0, which debuted in April, is a "substantial upgrade from its predecessor," according to Alibaba.
(Source:www.cnbc.com)
Homepage
Send to a friend
Printable version
Share
