Alibaba's Cloud Computing Prospects Dim Amid US-China Tech Fight
Alibaba's shares dropped nearly 10% after announcing that it will not proceed with the spinoff of its cloud computing segment due to US chip export restrictions. The restrictions have created uncertainties for Alibaba's cloud arm, as it relies on US chip supplies. Despite falling short of estimates in its quarterly report, Alibaba reported healthy year-over-year user growth for its online shopping sites. The company emphasized that AI is a key part of its strategic direction, but faces competition from Tencent, Baidu, and US tech giants. Baidu's CEO recently warned about the consequences of China's rush to develop AI models.