Alibaba's Honey Badger is about to be launched.

The most aggressive "animal" in the Alibaba Zoo — the honey badger — is set to go for an independent IPO.

On the evening of November 10, Alibaba announced via the Hong Kong Stock Exchange (HKEX) that it plans to spin off its wholly-owned subsidiary T-Head (Shanghai) Technology Co., Ltd. (hereafter referred to as "T-Head", whose name is the Chinese nickname for honey badger) for an independent listing on the Main Board of HKEX. HKEX has confirmed that Alibaba may proceed with this spin-off. T-Head submitted its listing application form to HKEX in confidential form on September 11, planning to complete the spin-off through global offering of H shares, and is expected to remain a subsidiary of Alibaba after the completion of the transaction.

In the announcement, T-Head is positioned as China's leading full-stack data center chip supplier. To put it plainly, it is a chip company with full-line layout covering CPUs, AI chips, storage controllers, and smart network adapters. According to the caliber disclosed by Alibaba CEO Wu Yongming at the earnings call in March this year, the cumulative delivery of its chips has exceeded 470,000 pieces, and its annualized revenue has reached the level of 100 billion yuan.

This is not the first time that Alibaba has pushed its business to the threshold of listing.

On March 28, 2023, Alibaba launched the largest organizational transformation in its 24-year history, spinning off six business groups: Alibaba Cloud Intelligence, Taobao Tmall, Local Services, Cainiao, International Digital Commerce, and Digital Media and Entertainment. Daniel Zhang set the tone for this transformation: all business groups and companies that meet the conditions will have the possibility of independent financing and listing. Two months later, Alibaba announced a comprehensive asset restructuring plan, under which the Cloud Intelligence Group would be fully spun off and listed within the next 12 months, and Cainiao would initiate a Hong Kong stock IPO.

However, neither of the two plans came to fruition. In November 2023, Alibaba changed its statement in the earnings report: the US's expanded restrictions on exports of advanced computing chips brought uncertainty to the prospects of the Cloud Intelligence Group, and a full spin-off might not enhance shareholder value as originally envisioned, so the company decided not to push forward the plan. In the same month, the IPO of Freshippo was suspended. In March 2024, Cainiao also withdrew its listing application. The management explained at that time that the financial information in the prospectus had expired, and under such market conditions, it was no longer possible to optimize shareholder returns by having a single business enter the capital market for trading.

In the following three years, Alibaba's capital narrative shifted from spinning out to bringing back: exiting non-core assets, share repurchases, and dividend distribution, with its strategic focus returning to e-commerce and cloud. It was not until AI turned computing power into a hard currency that the story took a turn again.

The Origin of a "Honey Badger"

The story of T-Head started from Alibaba Cloud.

In 2008, Wang Jian joined Alibaba to lead the cloud computing business, and Alibaba Cloud was established the next year. At that time, Alibaba's underlying infrastructure was running on IBM minicomputers, Oracle databases, and EMC storage systems. Wang Jian launched the "de-IOE" initiative internally and set an iron rule of no longer purchasing minicomputers. By 2013, the last IBM minicomputer of Alibaba was decommissioned. However, the underlying chips were still controlled by others: server CPUs relied on Intel, and computing power accelerators were purchased from NVIDIA. The largest expense item of the cloud business kept flowing profits to overseas suppliers.

Global cloud giants are all taking this path. Google was the first, deploying self-developed TPUs in its data centers as early as 2015. Amazon acquired chip company Annapurna Labs in 2015, breaking the ice for cloud vendors to develop self-developed CPUs. Microsoft and Meta followed later, launching their respective products in 2023. The threshold for self-developed chips never lies in design, but in scale. Only when the company's own procurement volume is large enough can the fixed costs of tape-out and R&D be spread thinly, which is why only a few cloud vendors around the world can afford to play this game.

According to this timeline, Alibaba is not the first. The origin of T-Head can be traced back to 2015, when Alibaba cooperated with Hangzhou C-Sky Microsystems to develop cloud chip architecture, and became its largest shareholder in 2016. Founded in 2001, C-Sky Microsystems is one of the early domestic enterprises with independent CPU IP core technology.

During the same period, Alibaba also laid out a wide network in the chip track through investment: in 2016, it co-led the investment in programmable chip company Barefoot Networks with Tencent, and in 2017, it successively invested in Cambricon, DeepPhi Technology, and Kneron. Most of the outcomes of this network were M&A exits: DeepPhi was sold to Xilinx, Barefoot was acquired by Intel, and only T-Head grew into a significant business within the Alibaba system.

In October 2017, Alibaba established DAMO Academy, announcing an investment of 100 billion yuan in basic scientific research over three years, with chips being one of the first priority directions. In April 2018, ZTE was sanctioned by the United States, triggering supply chain alerts, and Alibaba fully acquired C-Sky Microsystems in the same month. A few months later at the Yunqi Conference, Zhang Jianfeng announced the integration of C-Sky Microsystems and the self-developed chip team of DAMO Academy to establish T-Head Semiconductor.

The name was finalized by Jack Ma. The technical team originally wanted to name it Hummingbird, which means small, fast and low-power consumption. Jack Ma rejected the idea: he had seen honey badgers in Africa not long before, which have flat heads and white hair, are not large in size, but are listed as the most fearless animals in the Guinness World Records, showing no fear even to lions and wolves. That year was also the year Jack Ma announced his handover of leadership. Before his complete retirement, he planted a seed of chip manufacturing for Alibaba.

The following eight years witnessed product iteration, and the company completed the leap from single-point breakthrough to full-stack layout.

In July 2019, Xuantie 910 was released, which was T-Head's first product. In September of the same year, the AI inference chip Hanguang 800 came out, which was used for visual recognition in Taobao's "Snap to Find" function, setting a global performance record at that time for ResNet50 inference, but this chip was almost entirely used to serve Alibaba's internal business.

In October 2021, the CPU Yitian 710 was released, and then deployed on a large scale in Alibaba Cloud data centers to undertake the analysis workload during the Double 11 shopping festival. In November 2023, the enterprise-level SSD controller chip Zhenyue 510 extended the product line to the storage field. Together with the mass-produced 400G smart network adapter and self-developed interconnection switching chip, T-Head can independently supply all three core components in data centers: computing, storage and networking.

It was the large model that significantly expanded the scale. In January 2026, the AI chip Zhenwu 810E was launched and has been deployed in multiple 10,000-card clusters of Alibaba Cloud; in May, Zhenwu M890 was released; at the Yunqi Conference in September, Zhenwu V900 was released, which is scheduled to be mass-produced in the first quarter of 2027. According to Wu Yongming, it is currently the AI chip with the strongest computing performance in China. At present, the Zhenwu series has supported the training and inference of the entire Tongyi Qianwen series. It can be said that the Zhenwu chip is the flagship product of T-Head.

Hundred-Billion-Yuan Revenue and the Wave of Chip Spin-offs by Large Tech Firms

The pace of T-Head moving towards the capital market has been accelerating throughout this year.

In January, it was revealed that Alibaba planned to restructure T-Head into an independent entity with employee shareholding introduced, before exploring an IPO. In March, Wu Yongming loosened his stance at the earnings call, saying that T-Head had achieved successful commercialization and an independent listing would not be ruled out in the future. Shareholding restructuring was completed in June. On September 11, the company submitted its prospectus documents in confidential form.

Compared with the two attempts in 2023, Alibaba's decision for this spin-off is much simpler. Cloud Intelligence is Alibaba's profit engine, and Cainiao is the infrastructure for e-commerce fulfillment, both of which are closely tied to the lifeline of the group. T-Head is different: it has been a cost center since its birth, hidden under the territory of Alibaba Cloud, undertaking the task of reducing the group's computing power cost and ensuring supply chain security, and making profits is not its top priority.

It was large models that changed this arithmetic. In February 2025, Wu Yongming announced that more than 380 billion yuan would be invested in the construction of cloud and AI hardware infrastructure in the next three years, with the total amount exceeding the sum of the past ten years. In March 2026, he set a revenue target for this round of investment, that the annual revenue of cloud and AI commercialization including MaaS will exceed 100 billion US dollars in the next five years. With the exponential explosion of computing power demand, T-Head's chips are no longer enough for internal use only, and need to be pushed to the open market for independent pricing.

T-Head's commercialization figures are also impressive. According to public disclosure, as of April 2026, the cumulative shipment of the Zhenwu series AI chips reached 560,000 pieces, serving more than 650 enterprise customers, covering more than 20 industries such as intelligent driving, finance, and large models; by the middle of the year, the proportion of external commercial customers has exceeded 60%, the deployment scale in the financial industry has exceeded 100,000 cards, covering more than 150 financial institutions, and more than half of the computing power in China Unicom's Sanjiangyuan Intelligent Computing Center project comes from T-Head.

IDC data shows that in terms of shipment volume, Huawei Ascend ranks first with 812,000 pieces, T-Head ranks second with 265,000 pieces, followed by Kunlunxin and Cambricon with 116,000 pieces each. In the first half of 2026, China's AI accelerator shipment reached about 2.008 million pieces, of which non-GPU accelerator shipment was 1.016 million pieces, a year-on-year increase of nearly 80%, exceeding GPU for the first time in history. Huawei, T-Head, Kunlunxin, and Cambricon together account for 95% of the non-GPU market.

However, the actual quality of the hundred-billion-yuan revenue is exactly the biggest question mark of this listing.

The main application scenarios of T-Head's products are almost all within Alibaba, and its revenue base is highly bound to the capital expenditure of its parent company. The so-called proportion of external customers exceeding 60% is calculated based on the chips sold to external commercial customers after being integrated through Alibaba Cloud: what is sold is computing power, and the payment entry is still Alibaba Cloud. The absolute proportion of external revenue remains to be disclosed in the prospectus.

It is reported that this IPO will raise 20 billion to 30 billion US dollars, with a valuation range of 25 billion to 62 billion US dollars. Based on this calculation, the shares to be issued in this transaction are about 3% to 12%. Referring to the market value of Hong Kong-listed AI chip companies such as Iluvatar CoreX and Biren Technology, T-Head is expected to reach a market value of more than 200 billion Hong Kong dollars after listing.

JPMorgan Chase stated in its October research report: This valuation calculation is highly dependent on the future business scale and final transaction structure. Since the revenue is still mainly from Alibaba's internal business and the external commercialization path is not yet clear, in the absence of independent financial data, this range is more like an indicative price tag for the value of options, rather than a modeling based on fundamentals.

The valuation range is quite large, and the market is obviously not yet clear about how to price T-Head. In the wave of spin-offs by large tech firms, the most direct reference is Kunlunxin.

This chip company under Baidu started independent operation in 2021, submitted its listing application to HKEX in January this year, and launched the Sci-Tech Innovation Board counseling in May. JPMorgan Chase gave it an independent valuation of 40 billion to 49 billion US dollars, with orders in hand exceeding 320,000 pieces. Its customer list includes China Mobile, China Merchants Bank, China Southern Power Grid, and Geely, and the proportion of external business has exceeded the supply to Baidu's internal business.

Other large tech firms' chip assets are still kept within the companies. Tencent has three self-developed product lines: Zixiao, Canghai, and Xuanling. ByteDance's chip team has expanded to more than 1,000 people, working on four parallel directions: AI chips, CPUs, VPUs, and DPUs. Reports say it is also developing self-developed server CPUs, while evaluating both the Arm and RISC-V architecture routes. Automakers are doing the same: NIO and Li Auto have long laid out self-developed chips, but have not yet reached the stage of independent IPO.

Previously, the wave of domestic GPU listings has taken the lead. Moore Threads, Micsemi, Biren Technology, Iluvatar CoreX, Enflame Technology, plus the earlier Cambricon and Hygon Information, seven domestic chip companies have successfully completed their IPOs. The addition of T-Head and Kunlunxin has shifted this round of chip IPO wave from independent startups to chip assets incubated within large tech firms.

This article is from the WeChat Official Account "ChinaVenture", author: Li Man, authorized for release by 36Kr.