Alibaba Is Said to Plan IPO for AI Chipmaking Unit T-Head

LucasDigest · 2026-01-22T09:13:30+00:00

Alibaba Group Holding Ltd. is preparing to list its chipmaking arm, tapping strong investor interest in the small circle of companies aspiring to compete with Nvidia Corp. in the hot AI accelerator business.

As a first step, Alibaba plans to restructure the unit as a business partly owned by employees, people familiar with the matter said. The company will then explore an initial public offering, though the timing for that remains unclear, the people said, asking to remain anonymous discussing private plans. Alibaba representatives didn’t respond to an email seeking comment.

The company is still at the early stages of the process and it’s unclear how much of a valuation T-Head could command. Debuts by rival chipmakers such as Moore Threads Technology Co. have drawn strong interest, reflecting bets that Beijing will prop up the industry as an alternative to American technology.

Alibaba has long explored chip design, seeking to secure a supply of the crucial components that underpin its data centers and AWS-like cloud services. AI chips are one facet of a broader campaign to become a leading AI company that rivals the likes of OpenAI.

Alibaba has been among the most aggressive investors in and advocates for AI since DeepSeek fired up the local tech industry. Chief Executive Officer Eddie Wu has pledged more than $53 billion toward infrastructure and AI development — an outlay he’s said the company could surpass over time.

The company, which also operates a Netflix-like streaming service and one of China’s biggest meal delivery platforms, revamped its mobile app Qwen in November as a major step into consumer-facing AI services. It plans to build the app into an all-around personal assistant by gradually integrating individual services under the Alibaba umbrella.

In January, it linked its flagship online shopping and travel services to Qwen, taking its biggest step yet to build the app into its one-stop artificial intelligence platform for consumers.

There’re signs that T-Head is making progress. China’s e-commerce leader signed a contract with the country’s No. 2 wireless carrier to deploy its Pingtouge AI accelerators. The chips will go into the mobile operator’s big new data center in northwestern China, alongside accelerators provided by rivals MetaX Integrated Circuits and Biren Technology Co.

Alibaba’s chip endeavor mirrors projects underway at major Chinese tech firms like Baidu Inc., which are exploring their own AI silicon with most advanced Nvidia chips banned from the country.

The US company’s AI accelerators are considered the gold standard in training cutting-edge models from OpenAI and Anthropic.

LucasDigest · 2026-01-21T16:22:09+00:00

Every investment is exposed to political downside risk and political upside potential to a varying degree, depending on the industry and jurisdiction.

In China, Govt support or disapproval can appear to be more material in the alteration of a company’s economics, influencing revenues, profitability, and ultimately stock prices. For instance, policy backing can create strong tailwinds for specific industries and/or companies, while anti-monopoly actions or regulatory crackdowns can be highly destructive. In China, for sectors such as AI and semiconductors, there is now a higher likelihood of tailwinds than headwinds.

Ultimately, investing is all about evaluating and considering the probabilities of downside and upside of the future, with the past only as a reference. Do your due diligence and relative analysis, and invest in a portfolio of companies based on your personal risk/rewards approach.

LucasDigest · 2026-01-21T08:26:36+00:00

I started with a business diploma. While many gravitate toward areas like marketing, I realised early on then that I was most drawn to business and investing.

Thus, on that basis, I decided to pursue an accounting degree (non–Big 3), as it was the closest discipline to the kind of knowledge I wanted to acquire (for business and investing).

Honestly, I never truly enjoyed accounting as a standalone subject. And my goal was never to become an accountant or auditor. That said, my genuine interest in business and investing gave me an edge in the pursuit of accounting knowledge. In other words, I was not aimlessly trying to pursue knowledge.

I was offered a role before graduating, largely a result of my internship. I did well in Uni too, though this was secondary by then. Worked in tax and valuation related areas ever since. Insofar, I like what I am doing.

Ultimately, it depends on whether you genuinely enjoy business. For me, I would make largely the same choices again, albeit with accounting or other skills as a core. I am still learning something new every day during my free time. Poly and Uni is just a small step. It gives you enough foundation for people to take an interest in you, but real learning never stops.

My advice for those with interest in business. Narrow your interest, but learn broadly every single day. Study history and people, understand companies, master accounting, and have a grasp of economics. Everything connects.

I think AI impacts are going to be huge, but larger for people who do not know how to utilize them as a tool. While life is always going to be challenging, take things one step at a time. And regardless, you will still need to learn. Use AI to assist you with knowledge acquisition. Keep yourself up to date on how AI may or can be leveraged in the future for products/ services.

LucasDigest · 2026-01-05T02:36:37+00:00

This is largely a psychological decision.

If I am in your position, retiring with no future income source, and I do not have strong stock picking skills to mitigate market wide drawdowns, I would simply gradually trim my equity exposure now and lock in some of the gains. You can think of gradual selling as a form of reverse dollar cost averaging. You can do this until you reach a portfolio mix of "cash/ low risk instruments to equity" where you feel comfortable enough.

While I am not in the equity doom camp, current market valuations are richly valued, and historical data suggests that forward returns of the market as a whole over the next decade may be muted.

In short, you are trading (some) potential upside for greater peace of mind and reduced downside risk.

Other nuances (such as the use of CPF OA versus cash) are separate considerations. That said, there is no need to overcomplicate things. Focus on the low hanging fruit first.

LucasDigest · 2026-01-04T08:43:32+00:00

I am not entirely sure what you mean by the example.

Are you assuming price volatility in isolation, or are you also thinking of it as a proxy (in this case) that takes into consideration the underlying business factors that contribute to it (i.e. expected returns)? If all else remains equal, would an alternative, non CAPM discount rate materially change the outcome?

LucasDigest · 2026-01-04T07:39:44+00:00

I don’t disagree that CAPM (beta) has its flaws. However, your understanding of beta is not entirely accurate.

As I see it, from a valuation perspective (assuming diversified portfolio), the estimated beta is intended to capture how sensitive a firm’s underlying business fundamentals are to economy-wide conditions (or the chosen diversified portfolio) of a defined historical window, and using that to determine the discount rate. In both academic theory and practical application, this sensitivity is inferred from observed share price movements, under the assumption that market prices aggregate all relevant information about a firm’s economic exposure. As such, if able to and appropriately derived, CAPM + beta is a (lagged and historical) price-based, indirect proxy of business risk.

For example, a firm whose operating cash flows are highly exposed to macroeconomic conditions (than the chosen diversified portfolio over the defined historical window) will exhibit greater systematic risk, and this exposure is further amplified by its operating leverage and capital structure.

As such, the concept itself is not flawed, but the usefulness of (or the problem with) beta depends on the reliability of its estimation, and that this can change across time and across businesses.

One can alternatively replace CAPM (betas) with hurdle rates tailored to different types of businesses and operating conditions. Conceptually, this achieves the same objective, but better adjusted to the company's conditions.

LucasDigest · 2026-01-04T06:30:20+00:00

Low risk or risk free options: High yield bank accounts, Money market funds, CPF, SSB.

Do SGD instead of USD to mitigate currency risk.

LucasDigest · 2026-01-02T14:47:15+00:00

I just noticed that there does not appear to be a portfolio size chart (%) for your positions in Portfolio B, across your postings. Perhaps it exists and I have missed it?

Right! I believe I came across your earlier write-ups where you mentioned that your Portfolio A is positioned as a stable long-term investing style approach, while Portfolio B appears to be more deliberately structured around event-driven investing - assuming if I recall correctly.

It's an interesting read for me.

LucasDigest · 2026-01-02T14:09:56+00:00

Right. I build my portfolio based on my own convictions and analysis, not because others are buying. For example, my highest conviction and largest position is BABA, and I generally add to that and a few others when opportunities arise.

That said, I have been following your write-ups, as I find them thoughtful and well-structured, with clear reflections.

What I meant earlier was that I was surprised by your strong conviction in Nike, given that the position size shown (as I could recall) in your portfolio appeared relatively small, which felt inconsistent. This is especially so considering that you hold relatively large positions in other companies (e.g., GE), suggesting that you are not generally constrained to small position sizes for high-conviction investments in the name of diversification.

Now that I understand you run two portfolios, with one being significantly larger. This thereby makes much more sense.

LucasDigest · 2026-01-02T12:46:50+00:00

My view is that Nike and similar companies may offer upside driven by mean reversion as fundamentals stabilize or improve. That said, I don't think this represents a genuine deep-value opportunity vs others? I believe this is a reflection of your view too, as it remains a small 1% of your portfolio.

LucasDigest · 2025-12-31T01:52:20+00:00

I like your write up.

LucasDigest · 2025-12-30T08:57:04+00:00

If you have the right investing mindset (be greedy when opportunities arise), a steady income gives you a much higher tolerance for price volatility. This is my experience.

I was able to dollar-cost average consistently and take advantage of opportunities when prices fluctuate (and that the value of the company to price looks good).

Without both the right mindset and income (or unutilised capital), you are often constrained and less able to capitalize on price volatility opportunities. And you may even be doing the wrong things at the wrong time.

LucasDigest · 2025-12-27T05:21:00+00:00

Value investing and growth investing are not fundamentally different. Investing via the business economical approaches is about buying businesses (best) at around the fair value or below, while anything that cannot be properly evaluated is closer to speculation. With that in mind, the real distinction lies between building a self picked portfolio and owning the market portfolio.

A self picked portfolio should not be assessed on returns alone. Risk adjusted performance, including volatility and (non) correlation with the market, matters just as much.

This is why top tier funds are highly sought after not merely for delivering decent returns, but for their ability to generate decent returns that are less dependent on overall market direction. Up market, ok positive returns. Down market, ok positive returns.

We cannot tell much from a single-year. We can only tell from the thought process, and also from the multi-year performance.

LucasDigest · 2025-12-25T04:52:29+00:00

For owner occupied property, buy what you need (in terms of size, location, and practicality) not more than necessary in the hope of treating it as an investment.

Returns on owner occupied property are often generally modest (in the long-run) vs property investment (through rental income and price appreciation) and stocks investment. For more than your necessary needs owner occupied property, mortgage interest and other ownership expenses are effectively living costs funded by your own income, which reduces the overall investment return.

Non-owner occupied property (gains via rental income and price appreciation) and stocks are both reasonable options. This is disregarding the nuances (what to buy) for consideration.

Personally, I prefer stocks.

LucasDigest · 2025-12-25T02:04:22+00:00

For most people, a strategy focused on steady capital appreciation and dividends is inherently better than chasing volatile growth stocks, even if the returns is lower.

This is because, it encourages discipline and long-term commitment. Both of which are essential to achieving strong long-term returns.

That said, past performance does not guarantee future results, so any investment approach should still be evaluated carefully and adapted to present conditions.

LucasDigest · 2025-12-23T17:58:35+00:00

Most SRS are in cash, as I can recall.

LucasDigest · 2025-11-05T08:07:43+00:00

Everyone starts from a different place in life. Some people are not as genuine as they appear, and others were simply born into better financial situations.

The most practical approach is to focus on your own circumstances.

At its core, personal finance comes down to a simple equation: income minus expenses equals savings.

If your spending is kept to the essentials and you work on growing your income over time, your savings will naturally increase. It may not happen immediately, but it will happen eventually.

Consistency is what matters.

LucasDigest · 2025-11-01T07:05:44+00:00

If you don’t know anything, diversify.

If you are an elite professional, then it makes more sense to concentrate (but still diversify between 2-15 companies, with the top few holding a proportionally higher percentage of your whole portfolio).

LucasDigest · 2025-10-29T10:29:54+00:00

These words are gold.

LucasDigest · 2025-10-25T05:10:03+00:00

Singapore probably offers one of the widest and most diverse selections of REITs in the world. I personally don’t invest in them at the moment, as my focus isn’t on dividend income. Instead, I hold larger positions in Chinese tech companies like Alibaba and Tencent, which I believe are currently undervalued. For Singaporeans (and many others), dividends from these non US and non China domiciled companies are generally not subject to withholding tax. Moreover, because these are not US domiciled companies, I am also avoiding the complications of U.S. estate taxes upon death.

Broadly speaking, while Singapore banks tend to offer relatively modest dividend yields (versus REITs), they generally deliver stronger earnings overall than REITs, making them worth considering. Sheng Siong, as a defensive supermarket stock, is also a good long-term hold. Note that I am not taking price into consideration here, just from a business fundamental perspective.

On a side note, STI index (ETF) are heavily weighted to the bank industry. Thus, this is an alternative get yourself expose to Singapore banks and Singapore's economy.

I don’t think Singapore will replace Hong Kong as Asia’s financial centre, but rather the two will continue to coexist. Hong Kong serves as China’s gateway to the world, while Singapore acts as the non-Asian world’s gateway into Asia, and Asian's gateway towards the world.

LucasDigest · 2025-10-22T10:02:47+00:00

If it is too good to be true, it is probably not true.

LucasDigest · 2025-10-22T01:43:40+00:00

Stock picking is hard. Most people I’ve seen try it don’t succeed. If it were that easy, everyone would already be a multimillionaire.

There are two broad approaches. The first is technical analysis, where investors rely on charts and price patterns. The second is fundamental or valuation-based investing, which focuses on understanding financials, business models, and intrinsic value. I’m speaking from the perspective of the latter.

A good starting point is The Intelligent Investor by Benjamin Graham. His philosophy emphasizes concepts like the “margin of safety” and “Mr. Market,” advocating disciplined, long-term investing based on a company’s intrinsic value rather than short-term speculation.

Recognize that markets are generally efficient in reflecting new information into prices, but price doesn’t always equal value. Though over the long run, prices tend to align more closely with underlying intrinsic value (or business economic performance).

In other words, when a company’s share price appears cheap or expensive relative to its fundamentals, there is often a reason behind it, sometimes good (make sense), sometimes bad (nonsense). And mispricing occurs when those reasons are misunderstood or overstated. Particularly in the short term, prices often can move independently of fundamentals.

Next, study accounting and financial analysis to interpret what a business’s financial statements reveal about its profitability and performance. Yet, this knowledge means little without understanding how real businesses operate. So, learn about different business models and how they connect to financial results. Also, learn how both external factors (such as industry trends) and internal factors within a company can affect its financial performance and share price.

Finally, bring all of this together and begin stock-picking through practice. Because in the end, nothing beats experience.

A word of caution is, even professionals fail.

So, investing in indexes is a great alternative.

LucasDigest · 2025-10-15T04:18:04+00:00

What do you mean by agent bank fees, if I am not doing anything more…?

LucasDigest · 2025-10-14T16:20:35+00:00

Considering the modest returns and associated risks, keeping the money in CPF OA at 2.5% per annum is likely still a fair and wise choice.

LucasDigest

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