China's Alibaba is preparing to ‍list its ‍chipmaking arm, T-Head, Bloomberg News reported on ​Thursday, citing people familiar with the matter.

Alibaba's U.S.-listed ⁠shares rose 4.6% premarket after the report. As a first ⁠step, Alibaba ‌plans to restructure the unit as a business partly owned by employees before ⁠exploring an initial public offering, though the timing remains unclear, the report said.

Reuters could not immediately verify the report. Alibaba did not ⁠immediately respond to a ​request for comment.

The process is still at an early stage ‍and the potential valuation of the unit remains unclear, ​according to the report.

Founded in 2018, T-Head Semiconductor is Alibaba Group's wholly owned semiconductor chip unit, developing a range of processors from data center and artificial intelligence chips to Internet-of-Things products across the full chip design stack.

In November, Alibaba launched a major upgrade to its AI chatbot with a ⁠free consumer-facing app based on its ‌most advanced Qwen large language model, as it stepped up efforts to close the ‌gap ⁠with domestic rivals in China's AI race.

(Reporting by Bipasha ⁠Dey in Bengaluru; Editing by Devika Syamnath)