Alibaba Abandons Cloud Unit Spin-Off Amidst Escalating US Chip Restrictions
Alibaba shifts plans amid US chip restrictions. Discover the latest on their Cloud Intelligence Group and Q3 results. Stay informed with our concise news update.
Big news from Alibaba! They were going to do something new with their Cloud Intelligence Group, but now they're not. Why? Because the rules about computer chips from the United States got stricter.
Alibaba, the giant online shopping company from China, shared this news when they told everyone how they did in the third quarter of 2023. They made 9% more money compared to the same time last year, which is good news even though the economy has been a bit slow.
The boss, Eddie Wu, said they had a good three months and mentioned how they changed things around in the company earlier this year. They had a plan to split into six different groups to get more money through public listings. But now, they've decided not to do that with one part of their business called Cloud Intelligence Group.
Alibaba explained that the reason is the United States making it harder to export fancy computer chips. In their statement, they said, "We don't think just separating Cloud Intelligence Group completely would be good for our shareholders."
So, instead of going ahead with the original plan, Alibaba wants to figure out a good way for Cloud Intelligence Group to keep growing. The company earned 224.8 billion yuan (that's about $31 billion) in the three months ending in September, which is what experts thought would happen.
Alibaba is a big deal in China's online world, and how well they're doing is like a signal for how much people in China are buying things online. Lately, Alibaba has been facing some challenges because the government in Beijing is making rules stricter for tech companies, and people haven't been spending as much.
This change in plans follows similar news from another big Chinese company, JD.com, which did better than people expected.
Alibaba has been around since 1999, founded by Jack Ma. But things got tough in 2020 when Jack Ma criticized the Chinese government, and they canceled a plan for one of Alibaba's friends, Ant Group, to go public. Later on, Alibaba got a big fine of $2.75 billion for doing business in a way that the authorities didn't like.