Two and half years later, China’s regulatory campaign to rein in the power of Alibaba and its peers has reduced Ma from rock star to recluse. He now makes only periodic public appearances and seems wary of further provoking a government intent on demonstrating its control over China’s private giants and the entrepreneurs that built them. Alibaba investors have become so jittery about Ma’s well-being, and what it might mean for the company, that the arrest of a man in Hangzhou who shared Ma’s surname briefly wiped tens of billions of dollars off Alibaba’s valuation this week. “It reflects just how important investors believe Jack Ma is to Alibaba…and speaks volumes to just how fragile recovery is in China’s tech space,” says Jeff Halley, senior market analyst for Asia Pacific at OANDA.

China’s sweeping tech crackdown, launched in late 2020, has punched a $1.5 trillion hole in China’s internet sector, snaring firms like Alibaba, social media giant Tencent Holdings, and ride-hailer Didi Global in a vast regulatory web. In recent weeks, the tech crackdown appeared finally to be easing as officials sought ways to jump-start the country’s flailing economy. But the Ma arrest mix-up shows that investors are uncertain about the prospects of Beijing relaxing its crackdown and indicates that the state of the regulatory campaign remains unsettled even in the upper echelons of the Chinese government.

Jack Ma’s expensive speech

A different Jack Ma speech kick-started China’s crackdown.

In an October 2020 address to some of China’s top regulators in Shanghai, Ma—this time dressed in a dark blue suit and gray tie—likened China’s banking system to a “pawn shop” and blasted government watchdogs for stifling innovation. Less than a month later, Beijing halted the IPO of Ant Group, a fintech affiliate of Alibaba. Analysts expected the listing to be the biggest ever, a $37 billion debut in Shanghai and Hong Kong, but the government had quashed it.

VCG—Getty Images

Afterward, Ma disappeared from public view, seeding rumors that Chinese authorities had detained him. In January 2021, he reemerged in a livestream from an undisclosed location to host an event for rural teachers. Since then, Ma has been seen only a handful of times in public. Last May, he turned up at Alibaba’s campus for an event for the families of Alibaba employees called “Aliday.” In October, he was spotted on his yacht off the coast of Spain.

While Ma has kept a low profile, China’s government has dealt blow after blow to the firm he cofounded. In April 2021, China’s government fined Alibaba $2.75 billion for violating antitrust rules, accusing the e-commerce company of unlawfully barring some of its vendors from selling goods on other platforms. (Alibaba said it would accept the penalty “full of gratitude and respect” for regulators.) From November until January, Beijing issued Alibaba millions of dollars in fines for what the government said were anticompetitive practices, such as acquiring Chinese online navigation firm AutoNavi in 2014.

The fines ate into Alibaba’s profits; its net income reached $21.8 billion in 2021, but the real damage was to investor confidence. Since the crackdown started, Alibaba’s market capitalization has shrunk by $600 billion; it’s now $254 billion, down from a peak of $837 billion in October 2020.

Tech crackdown tug-of-war

Only days ago, the worst of China’s tech crackdown seemed to be over.

In mid-March, Chinese Vice Premier Liu He urged regulators to adopt a “predictable” approach to overseeing tech giants, which investors viewed as a sign that the tech crackdown may be easing. Alibaba’s stock price in Hong Kong shot up 41% after the announcement. Late last week, the South China Morning Post reported that China’s government may be letting up on the tech crackdown to stoke the country’s slowing economy.

That optimism faded on Tuesday morning, when CCTV, China’s leading state-run television station, published a report that a man with the surname Ma was arrested in Hangzhou for “subversion.” Internet users immediately assumed the person was Jack Ma because Hangzhou is home to Alibaba and CCTV reported that the man who was arrested had a two-character name, like Jack. In Hong Kong, Alibaba’s stock price fell 9.5% within minutes of the opening bell, erasing $26.5 billion from Alibaba’s valuation. Over an hour later, CCTV corrected its report to say the man had three characters in his name—not two—and Alibaba’s stock price recovered.

It was odd that China’s state-run news station was so slow to correct the report, considering the government is generally quick to monitor and censor China’s internet, says Alicia Garcia Herrero, chief economist for Asia Pacific at Natixis. The delay suggests China’s government may have been using the incident to keep Alibaba and the broader tech industry on edge, she says.

“For me, this was a warning signal [that] private companies in China are not out of the woods yet,” Garcia Herrero says.

It’s telling that Jack Ma did not refute the incorrect report himself, Halley says. “It wasn’t even Jack Ma…that was saying [the arrested man] wasn’t Jack Ma,” notes Halley. Ma has made no comment on the episode, and Alibaba did not respond to Fortune’s request for comment.

Ma’s failure to surface—even to challenge a false report about his own well-being—signals he’s still wary of angering Chinese authorities and that Beijing’s crackdown remains a threat to China’s tech giants and their founders, says Halley. “Jack Ma has been very loud in his silence.”

Garcia Herrero says the incident suggests separate forces within China’s government disagree on when to end the crackdown. It’s possible the erroneous arrest report was intended to counter other hints that China’s tech crackdown was over, such as Liu’s statement in March, she says. “It’s becoming very obvious there is a struggle in the government,” she notes.

Reasserting control over Ma and Chinese tech giants—even after signaling a regulatory easing—would not be out of step with a government that prizes order over economic gains, Garcia Herrero says. On Thursday, Chinese President Xi Jinping said China would remain steadfast in its commitment to its COVID-zero policy, even though Shanghai’s monthlong lockdown has cost the economy tens of billions of dollars and stirred public backlash.

Different departments within the Chinese government are sending varied messages about the state of the tech crackdown, says Bruce Pang, head of macro and strategy research at China Renaissance Securities. “We remind investors to keep a close eye on statements from the top leadership,” says Pang. With that in mind, the most recent announcement—a readout from a meeting of China’s top leaders released late last week—signals “a stricter policy stance” on tech companies compared with previous announcements, he says.

“I don’t think anything has changed with the Chinese government regarding big technology,” Halley says.