Alibaba Group chairman Daniel Zhang said his outfit was taking concrete steps towards unlocking value from our businesses and the board had approved a full spin-off of the Cloud Intelligence Group via a stock dividend distribution to shareholders.

The final goal is to become an independent publicly listed company.

Alibaba aims to complete the spinoff in the next 12 months and plans to include external strategic investors through private financings.

The company’s cloud intelligence group dominates China's market and is the third largest infrastructure-as-a-service (IaaS) public cloud provider in the world in 2021. It also provides platform-as-a-service (PaaS) and private cloud.

Alibaba's Dingtalk, an enterprise chat app and productivity platform, surpassed 600 million users as of Q3 2022, with 15 million paid daily active users and 23 million enterprise users, the company said previously.

It makes sense that Alibaba is grouping its cloud business and AI research team under one umbrella as these two go hand in hand. With each new breakthrough in AI, the amount of computational power needed to train data increases exponentially -- so does the cost.

This means that the business generated $2.7 billion in revenue during the first quarter, making up nine per cent of Alibaba's total revenues.