Advertisement
The company’s strategic shift to AI and chip investments is not only yielding significant returns, but also boosting its tech portfolio
2-MIN READ2-MIN Listen
ChangXin Memory Technologies (CXMT) and Zhipu AI have not only seen their share prices skyrocket, but they have also handed a windfall to their common backer:
Alibaba Group Holding.Before the listing of China’s memory-chip giant on Monday, Alibaba owned nearly 5 per cent of CXMT, making it the chipmaker’s largest industrial shareholder, according to the prospectus. Alibaba has invested about 7.6 billion yuan in CXMT since 2021. Based on Tuesday’s closing market capitalisation of about 3.14 trillion yuan (US$464 billion), Alibaba’s stake was worth more than 140 billion yuan – nearly 20 times its reported investment.These paper gains contrasted sharply with Alibaba’s previous high-profile investment. After acquiring a controlling stake in hypermarket operator Sun Art Retail in October 2020 for HK$28 billion (US$3.6 billion) – doubling its effective stake – it ended up with more than 25 billion yuan in impairment and disposal losses. Alibaba
sold its entire stake in the companyto Chinese private-equity firm DCP Capital for HK$13.1 billion on December 31, 2024.As Alibaba refocuses on e-commerce and
pivots towards artificial intelligence, it’s moved away from control acquisitions aimed at expanding a sprawling consumer-internet empire. Instead, it has shifted towards minority stakes and industrial partnerships across the AI supply chain.In 2023, company chairman Joe Tsai laid out four capital-management priorities: improving returns from operating businesses, investing cash flow in future growth, monetising noncore assets, and returning capital to shareholders.
Alibaba has also been one of the earliest and fastest-moving investors in China’s domestic model developers. As a wave of AI model start-ups emerged in 2023 and 2024, it backed
Zhipu AI, (known as Z.ai overseas), Moonshot AI and MiniMax, as well as Baichuan AI and 01.AI, although the latter two have since shifted away from their foundational AI models.Alibaba also invested about US$800 million in
Moonshot, the developer of the Kimi models, for a stake of around 36 per cent, according to its fiscal 2024 filings. It joined several subsequent funding rounds, though the size of those follow-on investments was not disclosed.Advertisement
Select Voice
Select Speed
1.00x