Alibaba shares dive more than 7% after cloud service called off
Shares in Chinese e-commerce titan Alibaba tanked more than seven percent at the Hong Kong open Friday after the firm's surprise decision to call off part of its high-profile restructuring because of the US-China chip war.
In a move that shocked investors, the Hangzhou-based tech giant said Thursday that US curbs on exports of advanced chips had forced it to call off the spinoff of its cloud computing arm.
The firm's stock dived 7.13 percent soon after the starting bell in Hong Kong, tracking a collapse in its New York-listed shares.
Washington has moved to bar the shipment to China of powerful chips, including those from California-based Nvidia, which are crucial to the development of artificial intelligence, on national security grounds.
In one of its most wide-ranging restructurings, Alibaba said in March it planned to split the vast group into six distinct entities that would be able to separately pursue funding through public listings.
But on Thursday, it called off the creation of its Cloud Intelligence arm in light of «the recent expansion of US restrictions on export of advanced computing chips».
«We believe that a full spin-off of Cloud Intelligence Group may not achieve the intended effect of shareholder value enhancement,» the company said in its earnings release.
«Accordingly, we have decided to not proceed with a full spin-off, and instead we will focus on developing a sustainable growth model for Cloud Intelligence Group under the fluid circumstances,» Alibaba said.
Alibaba is a key player in China's expansive digital economy and the operator of a major online shopping platform.
The Hangzhou-based group's performance is considered a barometer of domestic consumption, which has flagged in recent
