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1Fix the driver behind crashes, sound loss and screen glitches2Repair Windows errors before they cause bigger problems3Scan for outdated or missing drivers - takes under a minuteAlibaba scrapped its plan for a full Cloud Intelligence Group spinoff in November 2023, citing U.S. chip-export restrictions, uncertainty over a sustainable growth plan and doubt that separation would increase shareholder value as originally expected. The company kept the cloud business inside Alibaba and continued changing how it was managed and reported. By the quarter ended June 30, 2026, Alibaba had combined Cloud Intelligence Group with chip unit T-Head in a broader AI Cloud and Compute Services segment.
Why did Alibaba scrap the cloud spinoff?
In March 2023, Alibaba announced a “1+6+N” restructuring intended to give major business groups more independence. Some units could raise capital and potentially pursue public listings, subject to conditions. Alibaba’s shareholder letter described Cloud Intelligence Group as pursuing a full spinoff through a stock-dividend distribution.
On November 16, 2023, Alibaba said it would no longer pursue that full separation. The company cited expanded U.S. restrictions on exports to China of advanced-computing chips and uncertainty about the cloud unit’s sustainable growth model. It also said: “Given current uncertainties, it believes a full spin-off of Cloud Intelligence Group may not enhance value to shareholders as it had originally planned.” Alibaba said it would continue evaluating alternatives to highlight the unit’s value.
The company’s explanation was not that export restrictions alone made a spinoff impossible. It presented them as one source of uncertainty alongside its reassessment of growth and shareholder value. The decision meant the proposed full spinoff and independent listing were off; Alibaba did not announce a transaction price or a completed alternative separation.
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What did the 2023 cloud overhaul involve?
The spinoff reversal came amid leadership changes. Alibaba announced in June 2023 that Daniel Zhang would focus on Cloud Intelligence Group while the spinoff was underway. Eddie Wu became Alibaba Group CEO in September; Zhang briefly led the cloud unit before leaving that role around three months later, according to Bloomberg News.
On November 24, 2023, Bloomberg reported that Alibaba appointed executives to lead domestic public cloud, hybrid cloud and cloud infrastructure. It named Liu Weiguang as head of domestic public cloud and described two other leadership appointments, citing a person familiar with the matter. Bloomberg said Alibaba did not respond to a written request for comment. The specific appointments and their duties should therefore be understood as Bloomberg’s reporting, not as details confirmed in Alibaba’s public announcement.
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Bloomberg also framed the appointments as clarifying reporting lines after management turnover and as an effort to revive growth and regain market share. That context is distinct from Alibaba’s stated reasons for halting the full spinoff. Bloomberg described the cloud unit as worth $11 billion; that was the outlet’s characterization, not an Alibaba-announced valuation or sale price.
What happened to Alibaba Cloud after the spinoff was cancelled?
Alibaba retained the cloud business within the group, and its reporting structure later reflected a broader focus on AI infrastructure. In March 2026, Alibaba said it had established the Alibaba Token Hub Business Group. For the quarter ended March 31, 2026, Cloud Intelligence Group external revenue grew 40% year over year, and AI-related products accounted for 30% of external revenue, according to the company. Those figures refer to the earlier Cloud Intelligence Group reporting structure.
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For the quarter ended June 30, 2026, Alibaba reported a combined AI Cloud and Compute Services segment that included Cloud Intelligence Group and T-Head. The company reported the following results:
| Measure | Alibaba-reported result for quarter ended June 30, 2026 |
|---|---|
| AI Cloud and Compute Services revenue | RMB48,437 million (US$7,139 million), up 45% year over year |
| Adjusted EBITA | RMB5,628 million (US$830 million), up 133% year over year |
| AI-related product revenue | RMB12,376 million (US$1,824 million); the company reported a twelfth consecutive quarter of triple-digit year-over-year growth |
Alibaba also said its Zhenwu M890 AI processor had more than 650 external customers across over 20 industries through Alibaba Cloud services. This is a company-reported adoption figure, not an independently verified customer count. Because the June 2026 segment includes T-Head, its revenue and profit figures should not be read as standalone Cloud Intelligence Group results.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What the reversal means for investors
The 2023 plan offered a potential route to separate ownership and a listing; cancelling it left cloud inside Alibaba while the company reconsidered how to demonstrate the unit’s value. The 2026 reporting points to a different operating picture: cloud and chip activities are combined in the reported segment, with AI products and compute services prominent in the company’s reported growth. The later figures show performance of that combined segment, not what Cloud Intelligence Group alone would have earned as an independent company.
Alibaba CEO Eddie Wu said in the company’s May 2026 results announcement, “We are committed to investing for growth and making bold decisions where necessary.” That statement signals the company’s expressed investment posture, but it does not establish that Alibaba will revive the abandoned full spinoff or pursue a particular listing alternative.
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