Alibaba is pulling out of the cloud business

Core Systems on Alibaba Cloud
(Image credit: Alibaba Cloud)

Alibaba has confirmed plans to list its cloud computing business just months after an announcement that its operations would see the company split into six divisions.

The Chinese ecommerce giant's Cloud Intelligence Group is reportedly set for an IPO in the next 12 months ahead of further IPOs for shopping platform Freshippo and logistics firm Cainiao.

This comes in a period of financial instability for Alibaba, which posted a 2% increase in its quarterly revenue for cloud, falling short of analyst expectations.

Alibaba’s businesses are going up for sale

On an earnings call relating to the recently closed quarter, chairman Daniel Zhang explained: “We would love nothing more than to see one of these little Alibabas...becoming another big Alibaba, as big as the group company is right now.”

A rise in ecommerce platforms has diluted Alibaba’s stake in the sector, now having to compete with the likes of Pinduoduo and even Douyin (better known outside of China as TikTok).

Then, there are the COVID restrictions that have suppressed large proportions of the population and reduced spending. Although the republic is slowly recovering, many businesses have been left facing the challenges of a tough economy.

The country’s cloud sector continues to succeed as more and more operations go online, however growing competition from Tencent, Baidu, and more has caused Alibaba to have to reassess its strategy.

Accounting for 9% of the group’s entire revenue, the cloud business drew in $2.7 billion in the first three months alone.

Beyond infrastructure-as-a-service, Alibaba Cloud’s offerings also include private cloud and artificial intelligence technologies, including its own GPT-rivalling large language model, though this is nothing unique to Alibaba which resides in a sector flooded with similar offerings.

Via Reuters

Craig Hale

With several years’ experience freelancing in tech and automotive circles, Craig’s specific interests lie in technology that is designed to better our lives, including AI and ML, productivity aids, and smart fitness. He is also passionate about cars and the decarbonisation of personal transportation. As an avid bargain-hunter, you can be sure that any deal Craig finds is top value!