HONG KONG (AP) — Shares of Chinese e-commerce firm Alibaba Group Holding plunged as much as 10% in New York after it said Thursday that plans to spin off its cloud business were scrapped, citing uncertainties due to U.S. chip restrictions.

Alibaba Chairman Joe Tsai said Thursday during an earnings call that a spinoff of its cloud unit “may not achieve the intended effect of shareholder value enhancement” because of U.S. export restrictions on advanced computing chips.

The company also said that it is putting on hold plans to list its supermarket chain Freshippo.

The move is a sharp reversal from its plans following a massive restructuring earlier this year which split the firm into six major businesses. At the time, Alibaba said that the business units would eventually be able to raise capital and go public individually as that would maximize value for shareholders.

Alibaba’s New York-listed shares were down as much as 10% following the announcement. The company’s shares have fallen over 70% from its peak in late 2020, after authorities halted the initial public offering of its financial affiliate Ant Group and increased government scrutiny of the technology industry.

Tsai said that the company will “focus on developing a sustainable growth model based on emerging AI-driven demand” for computing services.

Alibaba’s logistics unit Cainiao Smart Logistics had in August submitted documents for an IPO on the Hong Kong stock exchange, and the company was “confident of the business fundamentals” of the logistics unit, according to Tsai.

Alibaba also said Thursday that it would pay out annual dividends for the first time, totaling about $2.5 billion.

In the quarter ended September, Alibaba revenue rose 9% to 224.79 billion yuan ($30.81 billion) compared to the same period last year.

Revenues for the quarter grew slower than in the quarter ended June, which saw revenue rise 14%, amid a slowdown in China’s economy following an initial rise in the beginning of the year when COVID-19 restrictions were lifted.

Alibaba made a net profit of 27.71 billion yuan ($3.79 billion) primarily due to a net gain from an increase in value of its equity investments, compared to a net loss of 22.46 billion yuan ($3.1 billion) during the same time last year.

CEO Eddie Wu, speaking in his capacity as Alibaba chief for the first time since he took over the reins in September, laid out three directions for Alibaba, stating that technology-driven internet platform businesses, AI-driven technology businesses and a global commerce network were the company’s key priorities.

“As the penetration rate of Internet users reaches a ceiling, the driver of growth in this sector will be technology, especially AI,” Wu said.

Alibaba is grappling with both a slowdown in consumer sentiment amid a struggling Chinese economy post-COVID as well as fierce competition from rivals such as e-commerce platform Pinduoduo and short-video platforms like Douyin, which have forayed into e-commerce.

Wu and Tsai had taken over the reins at Alibaba earlier this year as part of a leadership change that came on the back of its restructuring plans. They succeed Daniel Zhang, who was the former CEO and chairman of Alibaba.