Alibaba (BABA) is preparing for an IPO of its chipmaking unit T-Head, Bloomberg News reported, citing people with knowledge of the matter.
The company plans to restructure the unit as a business partly owned by employees. The Chinese e-commerce giant will then explore an IPO, though the timing for that remains unclear, the report added.
Alibaba did not immediately respond to a request for comment from Seeking Alpha.
The company is still at the early stages of the process, and it is not clear what the valuation of T-Head could be, the report noted.
Alibaba has long explored chip design, looking to secure a supply of vital components that underpin its data centers and cloud services. AI chips are one part of a broader campaign to become a leading AI company, the report added.
There are indications that T-Head is making progress. Alibaba signed a contract with the country’s number two wireless carrier to deploy its Pingtouge AI accelerators. The chips will go into the mobile operator’s new data center in northwestern China, alongside accelerators provided by competitors MetaX Integrated Circuits and Biren Technology, the report noted.