Chinese technology company Alibaba is being split up into six separate companies after founder and former boss Jack Ma resurfaced in China following a long absence from the public eye.
The different entities will seek fundraisings and market listings as China eases its crackdown on private enterprises.
The major restructuring will see the company split into six organisations:
Cloud Intelligence Group (cloud solutions)
Taobao Tmall Commerce Group (local online commerce services)
Local Services Group (delivery services)
Cainiao Smart Logistics Group (logistics)
Global Digital Commerce Group (AliExpress)
Digital Media and Entertainment Group (gaming, motion pictures and web services)
Analysts say the government’s decision to break up the company could be a consequence of the wealth and power amassed by Ma who openly criticised China’s regime on the eve of the scuttled Ant IPO in November 2020.
Ma co-founded Alibaba in 1999 when he was just 35 years old. Since then the company has become one of the largest and most well-known tech giants on the planet. Alibaba’s market capitalisation is currently estimated to be around $230bn.
Alibaba also made Ma China’s richest person with an estimated net worth of $38.6bn. Ma announced his retirement in 2019 to devote most of his time and wealth to philanthropy and education through the Jack Ma Foundation.
According to a report this week in the Alibaba-owned newspaper, South China Morning Post, Ma recently made a short stopover in Hong Kong, where he met friends and also briefly visited an international art fair called Art Basel.
This week, he also met staff and toured classrooms at the Yungu School in Hangzhou, the city in which Alibaba is headquartered. The entrepreneur talked about the challenges of using artificial intelligence within education.
According to the school's social media page, Ma is quoted as saying: "ChatGPT and similar technologies are just the beginning of the AI era. We should use artificial intelligence to solve problems instead of being controlled by it.”.
Once the richest man in China, Ma gave up control of financial technology giant Ant Group in January this year.
Alibaba’s major overhaul will likely put the spotlight back on Ant Group’s record-breaking IPO, which was unexpectedly suspended in November 2020.
Alibaba owns 33% of Ant, which operates AliPay, one of China’s two dominant mobile pay apps. There was no mention of Ant in Alibaba’s announcement for its overhaul overnight.
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