Alibaba sheds $360M Bilibili stake for AI push and business overhaul

Alibaba sheds $360M Bilibili stake for AI push and business overhaul is profiled by BTW Media because published evidence links it to internet infrastructure, governance, operational dependencies, or market visibility.

• Alibaba has sold $360 million of Chinese online video firm Bilibili shares, aiming to focus on AI and streamline holdings.
• Bilibili’s stock experiences a notable decline of up to 8.4% in Hong Kong following Alibaba’s sale of 30.85 million Bilibili American depositary receipts at a 5.5% discount compared to the previous day’s closing price.
• Alibaba divests from XPeng Inc. and SenseTime Group Inc. to prioritize core operations and invest in AI startups.
• Bilibili faces competition exhaustion from Douyin and Kuaishou Technology, struggling in mobile games and online commerce.

In an effort to secure funds for strategic investments, Alibaba Group Holding Ltd. has recently sold approximately $360 million worth of shares in a Youtube-like Chinese streaming platform Bilibili Inc. This move, marked by a considerable discount, represents Alibaba’s ongoing initiative to streamline its holdings and redirect resources towards emerging technologies such as AI.

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Impact on Bilibili’s stock and market reaction

Alibaba’s sale of 30.85 million Bilibili American depositary receipts (ADR) at $11.60 each, at a discount of around 5.5% compared to the previous day’s closing price, has garnered significant attention. Following this transaction, Bilibili’s stock experienced a notable decline of up to 8.4% in Hong Kong, marking its most substantial drop in two months.

Alibaba’s strategic shift and investment focus

Over the past year, Alibaba has been gradually divesting shares in various companies, including electric-vehicle manufacturer XPeng Inc. and AI firm SenseTime Group Inc., while also reducing its stake in ride-sharing company GogoX Holdings Ltd. This divestment strategy aligns with Alibaba’s broader restructuring efforts aimed at focusing its business portfolio on core retail operations and technological innovations.

In addition to asset sales, Alibaba has been actively involved in major fundraising activities for Chinese AI startups, signaling its commitment to establishing a presence in the AI world. Despite these divestments, Alibaba remains a significant shareholder in prominent entities such as Weibo Corp. and Sun Art Retail Group Ltd.

Also read: Alibaba trims stake in Xpeng for second time in December

Bilibili’s tough road in Alibaba’s response to competition

During a February earnings conference call, newly appointed Chief Executive Officer Eddie Wu vowed to boost investments in Alibaba’s core businesses in response to mounting competition from rivals like PDD Holdings Inc. and ByteDance Ltd. Despite requests for comment on Thursday, Alibaba remained silent.

Also read: PDD’s Colin Huang becomes China’s richest tech billionaire

Bilibili, although outside of Alibaba’s core expertise, has been grappling with exhaustion from competing against ByteDance’s Douyin and Kuaishou Technology.

Its mobile games division has struggled to produce consistent hits, reporting a 12% sales decline in the December quarter.

In addition, its venture into online commerce faces fierce rivalry from Douyin and Xiaohongshu. Despite operating for over a decade, the Shanghai-based company remains in the red.

Alibaba became Bilibili’s principal shareholder in February 2019, with interests extending beyond financial stakes to significant advertising collaboration on its video-streaming platform. Their collaboration on content creation began in 2018, according to Bilibili’s latest annual report.