On Thursday, Alibaba (BABA.US) saw its shares rise nearly 4% in pre-market trading, reaching a price of $175.20. The movement follows reports that Alibaba is preparing to list its chip manufacturing unit, T-Head Semiconductor, a move fueled by strong investor interest in the small group of companies attempting to compete with Nvidia.

According to informed sources, the first step involves Alibaba restructuring the unit into a commercial entity that will be partially owned by its employees. Subsequently, the company will consider an Initial Public Offering (IPO), although a specific timeline has not been established.

It is understood that the process is still in its early stages, and the potential valuation for T-Head Semiconductor remains unclear.