Alibaba cancels cloud split

Cites 'uncertainties' created by US regulation

China's Alibaba Group has cancelled its plan to spin out its cloud unit into a separate business, citing uncertainties created by US export curbs on AI chips.

The company, a multinational operating across sectors, originally announced its plan to split into six separate units this March. It would have been the biggest restructuring in the company's 24-year history.

One of those units, the Cloud Intelligence Group, would have covered Alibaba's cloud and AI efforts, as well as businesses like the DingTalk collaboration tool.

However, in earnings documents released this month the company said, "The recent expansion of US restrictions on [the] export of advanced computing chips has created uncertainties for the prospects of [the] Cloud Intelligence Group."

When the news was first announced analysts estimated the cloud business could be worth between $41 billion and $60 billion, but was likely to attract heavy regulatory scrutiny in both the US and China.

The news follows former CEO Daniel Zhang, who had been set to take on the leadership of the Cloud Intelligence Group, quitting the cloud business in September.

Alibaba's recent filings also show that founder Jack Ma's family plans to sell 10 million shares in the company, worth about $871 million.

The company reported Q2'24 earnings of RMB224.8 billion ($31 billion), roughly in-line with analyst expectations.