Alibaba Cloud, Alibaba’s cloud computing subsidiary, unveiled its Tongyi Qianwen ChatGPT-style product Tuesday morning during the Alibaba Cloud Summit 2023.
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Ali Baba Shares fell nearly 3% in after-hours trading after regulatory filings revealed that SoftBank sold much of its stake in the company.
SoftBank has sold about $7.2 billion worth of shares in the Chinese e-commerce giant through prepaid futures contracts, according to an analysis of company filings by the Financial Times released on Wednesday. Because of the sales, the report noted that SoftBank will now own a 3.8% stake in Alibaba, which has a market cap of nearly $250 billion.
Just about three years ago, SoftBank held a nearly 25% stake in the $100 billion-plus tech giant. At the time, Alibaba was SoftBank’s most valuable investment.
But over the years, SoftBank and its Vision Fund have posted huge quarterly losses amid a slowdown in the technology sector that has hurt valuations. In February, the Vision Fund posted a pre-tax loss of 660 billion Japanese yen (or about $5 billion), marking the unit’s fourth straight quarterly loss.
At the time, Masayoshi Son, the founder and CEO of the Japanese tech conglomerate and holding company, said SoftBank would operate in a “defense mode” and be “more conservative.”
Son invested $20 million in Alibaba in 2000 and helped the e-commerce startup grow into one of the largest tech companies in the world.
In March, Alibaba said it would split into six business groups, with each entity receiving its own funding and potentially going public. The move is “meant to unlock shareholder value and boost market competitiveness,” Alibaba said in a statement.
In 2020, Son resigned from Alibaba’s board of directors, shortly after Alibaba co-founder Jack Ma resigned from SoftBank’s board of directors.
Regard: AI could help Alibaba boost cloud business growth.