ALIBABA SCALES BACK PRESENCE IN U.S.

WASHINGTON: Alibaba Group Holding Ltd is scaling back its presence in Silicon Valley — a sign that the Trump administration’s crackdown on Chinese investment in United States firms is casting a chill.

After a flurry of deal-making, the Chinese firm’s corporate venture arm has announced only one fresh investment in the US this year, leading a US$26.4 million (RM106.72 million) funding round in a data-analysis startup called SQream Technologies.

And that’s a tiny deal compared with the hundreds of millions Alibaba lavished on highprofile US firms such as Magic Leap, Jet.com and Snap Inc.

Earlier this year the company lost its top US dealmaker, Michael Zeisser, said sources. Rather than hiring an outside replacement, Alibaba is promoting Peter Stern, who used to be an investment banker at Credit Suisse, said the people.

Alibaba’s pullback coincides with escalating tensions between the US and China.

The Trump administration has been cracking down on Chinese investments in US technology, from takeovers to venture capital funding rounds.

On Tuesday, administration officials said Trump wants Congress to give expanded powers to the Committee on Foreign Investment in the United States, (CFIUS), which reviews foreign takeovers.

Earlier this year, Ant Financial abandoned plans to buy MoneyGram International after CFIUS blocked the transaction on national-security grounds.

“Given the current environment it remains to be seen what investments they can make without CFIUS getting against them,” says Hans Tung, managing partner at GGV Capital.

Going “where they're more welcomed makes more sense.”

The shares fell 3.3 per cent to US$185.02 on Wednesday and are up 7.3 per cent so far this year.