Another giant after Baidu! Alibaba reportedly plans to spin off Pingtouge for an independent listing, with its stock surging over 7% intraday.

Following Baidu, another domestic internet giant is preparing to spin off its chip subsidiary for an independent IPO, and this time Alibaba may officially bring its long-hidden “nuclear weapon” to the public market.

On Thursday, January 22, Eastern US time, media reported that Alibaba Group is preparing to push forward with the independent IPO of its AI chip subsidiary, PingTouGe. Boosted by this news, Alibaba's US shares opened up 4.6% on Thursday, surged in early trading, and the stock price once reached $181.1, hitting an intraday high not seen since October 28, 2025, with the day's gain topping out at 7.4%, and a market cap growth of nearly $29.7 billion, equivalent to roughly RMB 207 billion. Subsequently, the gain narrowed to under 7%, still poised to set a closing high since the end of last October.

According to the Science and Technology Innovation Board Daily, reporters asked Alibaba about the news on PingTouGe, and Alibaba did not comment on the matter.

This potential IPO plan comes as the AI chip market is entering a period of frequent IPOs. Baidu’s Kunlunxin filed for a confidential listing on the Hong Kong Stock Exchange in January this year, reportedly aiming to raise up to $2 billion. Competitors such as Moore Threads have also attracted strong investor interest, reflecting overseas investors betting that China will support the domestic industry as alternatives to US technology.

Restructuring Still in Early Stages

According to Thursday’s reports, Alibaba will first internally restructure PingTouGe’s chip business, turning it into a business entity partly held by employees, and then explore the possibility of an IPO. The specific IPO timeline has not yet been determined, and the plan remains in preparation.

As the IPO move remains early and exploratory, the potential valuation of PingTouGe is unclear. However, investor interest in Chinese chipmakers has remained strong.

According to Securities Times, the Hurun Research Institute released its “2025 Hurun China Top 50 AI Enterprises” on Monday, showing Cambricon topping the list at a market value of about RMB 630 billion, with Moore Threads second at RMB 310 billion, and Enflame ranking third at RMB 250 billion. The top three: since its founding in 2016, Cambricon has focused on AI core processor chip R&D; Moore Threads (founded in 2020) specializes in full-feature GPU R&D; Enflame focuses on full-stack GPU development.

Thursday's report notes Alibaba wants to utilize investors’ strong demand for the AI accelerator market through this plan.

Currently, there are few companies worldwide able to develop AI chips rivaling Nvidia's. PingTouGe’s independent IPO is not only significant for Alibaba, but also will have a profound impact on China’s semiconductor industry. As a major chip initiative by a Chinese tech giant, it will strengthen China’s overall competitiveness in AI chips and help reduce dependence on foreign technology.

PingTouGe’s Technical Accumulation and Market Position

PingTouGe is a semiconductor chip company founded by Alibaba in September 2018, formed from the acquisition of C-Sky Microsystems and Alibaba DAMO Academy’s internal chip team, focusing on AI chips and RISC-V ecosystem technology. According to Sina Technology, PingTouGe has always been low-key in the industry and is seen as Alibaba’s long-hidden “nuclear weapon”.

PingTouGe’s capabilities were showcased centrally in September 2025. CCTV’s nightly news that month reported on China Unicom’s Sanjiangyuan Green Electricity AI Computing Center project, revealing PingTouGe’s latest AI chip, the PPU. Broadcast footage showed that this GPU chip, called PPU, featured 96GB HBM2e memory, inter-chip bandwidth of 700GB/s, PCIe 5.0×16 interface, and only 400W power consumption. On these key specs, it has fully surpassed Nvidia’s A800 and mainstream domestic GPUs, with overall performance equivalent to Nvidia’s H20.

Sina Technology cited other reports saying the first-generation PPU developed by PingTouGe can match Nvidia’s bestselling H20, and its upgrade outperforms Nvidia’s A100. With outstanding performance, stability, and cost-effectiveness, PingTouGe PPU chips have garnered a good reputation in the industry.

In terms of product deployment, PingTouGe has successively launched the “HanGuang” series of AI chips, the “YiTian” series general server CPUs, and enterprise-grade SSD controller chip ZhenYue 510. Self-developed CPU chips YiTian 710 and AI inference chip HanGuang 800 have both achieved large-scale deployment on Alibaba Cloud. For end-device chips, PingTouGe’s YuZhen IoT chip has shipped in the hundreds of millions.

Recent reports show signs that PingTouGe’s performance is making progress. According to the Science and Technology Innovation Board Daily, an AI computing insider said “PingTouGe’s AI chips have good performance. Alibaba mostly uses them internally.” Another industry chain source said, “PingTouGe PPU is mainly intended for inference scenarios and was launched only recently. Currently, there’s not much news about external applications.”

Additional reports mention Alibaba signed a contract with China’s second-largest wireless carrier, China Unicom, to deploy PingTouGe AI accelerators. These chips will compete with accelerators from MetaX and Biren Technology in China Unicom’s large new data centers in northwest China.

Broadcast footage from CCTV’s nightly news in September last year showed that Enflame, Biren, InnoStar, Taisuo, Suiyuan, Moore Threads and other Chinese AI chip companies had signed deals covering 1,747 devices and 22,832 computing cards, with total computing power reaching 3,579P. Alibaba Cloud accounted for 1,024 devices, 16,384 PingTouGe computing cards, totaling 1,945P computing power.

The Key Piece in the Full-Stack AI Layout

PingTouGe's potential IPO is a key part of Alibaba's AI strategy.

Media believe Alibaba has long explored chip design, aiming to secure supply of critical components for its data centers and AWS-like cloud services. AI chips are part of its broader strategy to become a leading AI company competing with OpenAI.

According to Sina Technology, industry insiders believe Alibaba and Google will lead AI development in China and the US, as both possess a full-stack layout spanning AI chips, cloud computing, large models, and AI applications. In Google’s AI framework, self-developed chip TPU is a key part. As the IPO process kicks off, PingTouGe’s foundational chip strengths built up over many years finally emerge, completing the last piece in Alibaba’s full-stack AI layout.

In January 2025, DeepSeek’s release of R-1 became a turning point for Chinese AI development, causing a profound global shift toward open-source models and fueling the rise of Chinese models in downloads and influence. Since then, Alibaba has been one of the most active investors and advocates in the AI field.

In February 2025, Alibaba announced plans to invest at least RMB 380 billion (over $53 billion) over the next three years in cloud computing and AI infrastructure, an amount exceeding its total cloud and AI investment over the previous ten years. These moves helped Alibaba’s stock outperform many competitors over the past year, even though its market cap of over $400 billion still lags behind Tencent’s $690 billion, the largest in China.

AI Chip IPO Boom

PingTouGe’s IPO plan aligns with the current listing boom in the AI chip sector.

Prior to Alibaba, another internet giant, Baidu, had announced a spin-off plan for Kunlunxin. According to media coverage on January 7, Kunlunxin selected an investment banking team to prepare for a Hong Kong IPO, aiming to raise up to $2 billion. On January 2, Baidu officially confirmed that Kunlunxin had confidentially filed for an IPO.

According to Baidu’s public statements, Kunlunxin is one of the few Chinese companies capable of designing high-performance accelerators. According to Tencent Technology, a research note previously stated Kunlunxin’s annual revenue for 2025 is projected at around RMB 5 billion, a sharp increase from RMB 2 billion in 2024. IDC data shows Kunlunxin ranked second in shipment volume in 2024.

Domestic GPU firms Enflame and Moore Threads went public on the Science and Tech Innovation Board in December 2025. Biren Technology and TianShu ZhiXin, like Kunlunxin, chose Hong Kong IPOs, while Suiyuan Technology’s IPO on the Innovation Board was accepted this Thursday, and Hanbo Semiconductor completed its listing counseling.

On January 2, 2026, AI chip designer Shanghai Biren Technology surged 76% on its first trading day in Hong Kong, while similar companies listed in mainland China at the end of last year saw first-day gains in the triple digits, providing strong valuation references for subsequent listings. This demonstrates investors’ surging demand for AI-related stocks and market bets that Beijing will continue to support AI as a strategic industry.

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