Alibaba Group said it is targeting spinning off its Cloud Intelligence Group within 12 months ahead of a planned initial public offering (IPO).
Alibaba Cloud’s revenue was $3,576 million (–3 percent) for the quarter ended March 31, 2023. In fiscal 2022-23, Alibaba Cloud’s revenue was $14,845 million (+2 percent). This includes revenue from Cloud services offered to Alibaba subsidiaries as well.
Alibaba Cloud adjusted EBITA was RMB1,422 million ($207 million) in fiscal year 2023, compared to RMB1,146 million in fiscal year 2022.
“This transformation will empower all our businesses to become more agile, enhance decision-making, enable faster responses to market changes and promote innovation to capture opportunities, thereby unlocking shareholder value,” said Alibaba Chairman and CEO Daniel Zhang in its earnings report.
Alibaba’s board of directors approved a full spin-off of the Cloud Intelligence Group via a stock dividend distribution to its shareholders. Subject to conditions, it targets completing the spin-off within 12 months.
Before the spin-off, Alibaba plans to include external strategic investors in the Cloud Intelligence Group through private financings. Cloud Intelligence Group intends to become an independent publicly listed company.
Alibaba Cloud aims to further expand its public cloud customer base and increase cloud utilization, and to leverage the historic opportunity in generative AI.
In April, Alibaba Cloud unveiled its latest large language model (LLM), Tongyi Qianwen. Alibaba plans to integrate the LLM into all business applications across Alibaba’s ecosystem soon, from DingTalk, Alibaba’s digital collaboration workplace platform to Tmall Genie, a provider of IoT-enabled smart home appliances.
Alibaba Cloud announced a new instance family that provides the same level of stability and offers up to 40 percent cost savings. For existing products, Alibaba Cloud reduced the prices of some of core utility products, including computing, storage, networking and security products, by up to 50 percent.