Chinese online retail giant Alibaba is looking to establish its U.S. headquarters in Seattle rather than San Francisco Bay area. Seattle is home to Amazon and Microsoft. In November last year, Alibaba opened an office in Seattle, and has since lured a number of Amazon and Microsoft employees. It makes sense for Alibaba to pick Seattle instead of any other technology center for its U.S. headquarters.

Alibaba Group Holding Ltd To Pick Seattle As Its U.S. Headquarters

Alibaba is ‘very vague’ about its plans

In Seattle, the Chinese company would pay less than half as much rent as in San Francisco. Sources familiar with the matter told Marc Stiles of the Puget Sound Business Journal that Alibaba is looking for office space in Seattle. Cascadia Capital managing partner Jamie Boyd told Stiles that he had “heard through multiple sources that Alibaba is likely setting up its U.S. headquarters in Seattle.”

However, the Chinese e-commerce giant’s local real estate broker Washington Partners declined to provide any details. Alibaba reportedly occupies 8,000 square feet space in Seattle, for which the lease runs through the end of 2015. Another unnamed source told Stiles that Alibaba had been “very vague” about its plans. The source said it was unclear whether the company was looking for a 5,000 square feet of small, permanent office space or an 80,000 square foot for its “Western headquarters.”

Alibaba to take on Amazon in its home turf

If Alibaba chooses Seattle, the money saved on rent could be spent on hiring talent. The Chinese behemoth intends to take on Amazon in the U.S. e-commerce market. American small businesses fear that Alibaba’s entry would crush the traditional retailers if the government didn’t close the tax loophole for online retailers. Surprisingly, Amazon is supporting the small businesses in their fight against the special tax treatment to online retailers.

Last month, Alibaba opened its first U.S. cloud computing center in California. It would be interesting to see if the company moves its cloud computing center to Seattle once it opens its U.S. headquarters there.