China’s Alibaba Group Holding cancels spin-off of cloud unit due to US export restrictions

Islamabad: China’s Alibaba Group Holding announced the cancellation of the spin-off of its cloud unit due to US export restrictions on chips used in artificial intelligence applications.

This decision led to a nearly 5% drop in its US-listed shares during premarket trading. The company attributed the uncertainty in the Cloud Intelligence Group’s prospects to the recent expansion of US restrictions on advanced computing chip exports.

Despite this, Alibaba reported second-quarter revenue of 224.79 billion yuan (US $31.01 billion), aligning with market expectations.

During the Singles Day festival, Alibaba exerted pressure on merchants to adopt aggressive pricing strategies, aiming to compete with rivals like Douyin and Pinduoduo, which consistently offer lower-cost products throughout the year, said a statement issued by the company.

These results mark the first quarterly report under the leadership of CEO Eddie Wu, a co-founder and longstanding associate of former chief Jack Ma, who assumed the role in September, succeeding former group chief executive Daniel Zhang.