Alibaba Group Holding (NYSE:BABA) inked a five-year cloud service deal with GoTo Group, Bloomberg reports. The agreement includes not divesting its stake in the struggling Indonesian ride-hailing provider until the end of the agreement.
Financial terms of the deal remain undisclosed.
According to Bloomberg, GoTo is unprofitable and has slashed jobs, exited the Vietnam and Thailand markets, and given up control of its loss-making e-commerce arm, Tokopedia.
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Under the new deal, GoTo will use Alibaba's cloud service to help run its ride-hailing and delivery services in Indonesia and Singapore.
Meanwhile, Alibaba is battling its demons. The Chinese e-commerce juggernaut is fighting an intense e-commerce and cloud services price war with domestic rivals as it recuperates from the three-year domestic regulatory antitrust crackdown.
Additionally, the U.S. advanced semiconductor sanctions on China are taking a toll on its artificial intelligence ambitions. Alibaba's Cloud Intelligence Group revenue grew by 6% to $3.65 billion in the fiscal first quarter. Net income plunged 29% to $3.34 billion.
Goto's early investor Alibaba's stake has shrunk to about 7.5% from 9% in 2022, Bloomberg writes.
Price Action: BABA stock is up 0.19% at $84.86 premarket at the last check Wednesday.
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Photo by Fooksou Lamimo via Wikimedia Commons