Alibaba to Make Its AI Model Public, But Its Cloud Spinoff Still Seems Far Off

Alibaba Group Holding will make its artificial intelligence model public, signaling a regulatory win from tough-on-tech Beijing. While China’s e-commerce leader touts its AI chops, don’t expect the spinoff of Alibaba’s cloud division to offer to offer a pure play on tech’s hottest trend any time soon.

The move puts Alibaba on par with U.S. tech heavyweights that have made their AI models public , like Meta Platforms , and it advances Alibaba into one of the most hyped areas of tech. The move almost certainly came with the consent of Beijing’s tough regulators, whose crackdown on Alibaba and the rest of the Chinese tech sector has ushered in dramatic stock-price declines since late 2020.

With Alibaba announcing its plan to break itself up earlier this year, investors are probably salivating at the thought of investing directly into the company’s cloud and AI business. After all, if the cloud arm were listed or spun off it would likely fetch a more attractive valuation than the core online retail business.Alibaba confirmed plans in May to spin off the cloud arm via a dividend distribution to shareholders, with the intention for it to become an independent publicly-listed group.

As a weakening Chinese consumer threatens Alibaba’s core business, the company has made changes, shaking up Alibaba Cloud management in an announcement this week. Former Alibaba CEO Daniel Zhang was set to remain as head of Alibaba Cloud when he stepped down from the group’s helm. But this week’s shake-up revealed that the new CEO, Wu, would take over the cloud division as well. The change does little to reassure markets that the cloud spinoff still has momentum.

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