When Jack Ma took to a Shanghai conference stage in October, China’s most famous entrepreneur was on the brink of pulling off an unprecedented $35 billion initial public offering for the finance juggernaut he co-founded two decades earlier. Ant Group Co.’s listing would value the company at more than $300 billion and swell Ma’s own fortune beyond its already blistering $61 billion, cementing his position as the nation’s richest man.

Ma, a co-founder of e-commerce behemoth Alibaba Group Holding Ltd., China’s largest company, told the audience that day at the Bund Summit that he was torn about speaking, but felt this was a “most critical” moment in the development of finance. What followed was a 20-minute roasting of anachronistic government regulation that would suffocate innovation in China. It was a vintage performance by the famously outspoken executive, known for his confident swagger and soaring rhetoric. But this time, like Icarus after he flew too close to the sun, Ma has found himself quickly brought back to earth.

Since September, China’s government has launched a coordinated regulatory crackdown, which in November scuttled the Ant public offering and, together with tough new antitrust rules, triggered about a $140 billion, or 17%, decline in the market value of Ma’s Alibaba.

Meanwhile, the flamboyant Ma has all but vanished from public view. As of early December, with his empire under regulatory scrutiny, the man most closely identified with the meteoric rise of China Inc. was advised by the government to stay in the country, according to a person familiar with the matter.

While his wealth and influence are being curbed, Ma isn’t on the verge of a personal downfall, say those familiar with the situation, who requested anonymity to discuss sensitive matters, as did other officials and executives with whom Bloomberg News spoke for this story. Instead, his public rebuke is a warning that Beijing has lost patience with the outsize power of its technology moguls, increasingly perceived as a threat to the political and financial stability President Xi Jinping prizes most.

Once hailed as drivers of economic prosperity and symbols of the country’s technological prowess, the empires built by Ma, Tencent Holdings Ltd.’s chairman, “Pony” Ma Huateng, and other tycoons are now suspect after amassing hundreds of millions of users and gaining influence over almost every aspect of daily life in China. “The [Communist] Party is trying to make it clear that Ma is not bigger than the party,” says Rana Mitter, a professor specializing in Chinese politics at Oxford University. “But they also want to show that China is a good place to do business, and that means that the party needs to show that entrepreneurs can succeed.”

It’s a precarious balancing act that Ma had seemed to master over his two decades at the helm of China’s biggest e-commerce and financial technology companies. He was well aware of an approaching avalanche of rules when he infamously called out “pawn shop” Chinese lenders, regulators who don’t understand the internet, and the “old men” of the global banking community during the speech in Shanghai. Seen as an attempt to deflect the impending regulatory onslaught, the speech set in motion an unprecedented series of events.

First came the suspension of the world’s largest IPO, a late-night announcement on Nov. 3 that stunned financiers from New York to Shanghai. A week later the antitrust authority issued 22 pages of proposed anti-monopoly rules, which many read as a veiled warning to Ma and fellow entrepreneurs to tone down the swagger. There are also new guidelines to grapple with for some large conglomerates like Ant that are involved in finance, as well as online lenders and insurers.

As the attacks mounted, China’s Politburo, the top decision-making body of the Communist Party, in December emphasized the need for stronger antitrust oversight and to prevent the “disorderly expansion of capital”-a signal that private enterprises can expect stricter controls.

Ma’s empire is in crisis mode. His top executives are part of a task force that has almost daily interactions with watchdogs. Meanwhile, regulators, including the China Banking and Insurance Regulatory Commission, are weighing which businesses Ant should give up control of to contain the risks it poses to the economy, according to officials with knowledge of the matter. They haven’t settled on whether to carve up its different lines of operation, split its online and offline services, or pursue a different path altogether.

In his first public address since the IPO was suspended, Ant Chairman Eric Jing was contrite. The company, he said on Dec. 15, was listening carefully to criticisms and conducting a “comprehensive self-review.” Ant declined to comment for this story. China’s banking regulator didn’t reply to a request for comment.

At Alibaba, executives are dealing with the antitrust legislation, which analysts say targets cutthroat competitive tactics in e-commerce. The company isn’t shielded from the Ant fallout either: Ant’s payments platform is used for most of Alibaba’s online transactions, and its lending services drive consumption on its sites.

Ma’s spectacular fall from grace has been years in the making. The former schoolteacher, who built Asia’s largest digital corporations, embodies a generation of self-made entrepreneurs, from Tencent’s Pony Ma to younger ones including ByteDance Ltd. founder Zhang Yiming and Meituan’s Wang Xing. They’ve balanced the sometimes conflicting demands of Beijing and powerful foreign investors to build hugely profitable private empires in communist China.

“Sometimes it’s hard to see clearly and understand where your limitations are,” says Eric Schiffer, chief executive officer of Los Angeles-based private equity firm Patriarch Organization, referring to Ma’s influence. “He has limitations. That is President Xi. He is not going to win that war.”

Ma has long cultivated his image as a rebel fighting the system, knocking down walls protecting state-owned enterprises. Time and time again, he emerged from the scuffles stronger. His companies have clashed with a raft of powerful entities-from state-backed giants to industry regulators-many of whom are now homing in on his empire.

Ma first rose to prominence as the online retailing genius behind Alibaba, which took on and dispatched one of the U.S.’s foremost corporations, EBay Inc., en route to becoming China’s biggest company. But it’s his second mammoth creation that’s landed him in hot water.

Ant was born 17 years ago under perilous circumstances, when China hadn’t yet granted private companies permission to operate in finance. With Silicon Valley-based PayPal Holdings Inc. as his model, Ma created the now ubiquitous Alipay service, used to pay for everything from loans to travel to McDonald’s deliveries. In the early days he emboldened staffers with promises like “If someone has to go to jail, I’ll go,” which he recalled at the World Economic Forum two years ago.

Alipay thrived. Its 2013 Quick Pay innovation was a hit with users. The service, which effectively created a payments ledger connecting 200 Chinese banks, simplified the online payment procedure, boosting the success rate for online purchases by a third, to 90%, and cementing Ant’s dominance in digital payments.

Its success rankled local banks. “We are not necessarily interested in buying a bank to change it. But because we have been chasing them around, they reformed,” Ma said in a 2017 Bloomberg Television interview. “When a tiger follows you, you can run much faster than you thought.”

He next envisioned a business line that would “stir things up” in China’s heavily regulated state bank sector. Ant created the money-market fund Yu’ebao-or “leftover treasure”-requiring balances of only 1 yuan (15¢) and allowing withdrawals anytime. Rolled out in 2013, it was part of his goal of creating a more transparent financial system that would disrupt banks, which for years had been sucking in cheap deposits and earning handsome net interest margins. Again he reassured employees with his “you focus on getting the job done. If someone has to go to jail, I’ll be the one” line, according to Chinese author You Xi’s book on the company.

The gamble paid off. In less than a year, assets under management grew to 100 billion yuan ($15.3 billion), with 30 million users signing up. Yu’ebao would go on to amass $270 billion, at one point becoming the world’s largest money-market fund.

Ma again drew the ire of banks, which held emergency meetings to discuss tactics to curb Ant’s expansion. Niu Wenxin, a prominent commentator for China Central Television, attacked Ant on his blog, labeling it a “vampire” and “financial parasite.”

Soon regulators, concerned that state-backed banks would be crippled by an exodus of deposits and by the huge amount of money sloshing around outside the central bank’s purview, rushed in to curb inflows.

Ma blasted out a pithy public statement accusing banks of tampering with people’s freedom on where to put their deposits. But he underestimated the power of China’s state-owned enterprises, whose entreaties to regulators resulted in rules restraining Ant’s activities.

Former People’s Bank of China Governor Zhou Xiaochuan acknowledged in 2016 that Ant as a shadow lender was subject to lighter capital requirements than traditional banks. “So you know it gives signals for many others to follow. Sooner or later, I think we are going to study on this issue, to set up a more equal footing competition,” he said in an interview with Christine Lagarde, who was then chair of the International Monetary Fund.

Ma’s lieutenant Lucy Peng, when she served as Ant’s CEO, persuaded the company to embrace regulators. Ant shifted its focus to playing matchmaker between financial institutions and its hundreds of millions of payment clients. The platform now sells mutual funds for more than 20 asset managers and has partnered with about 200 banks on loans.

About the time Yu’ebao was creating waves at home, Alibaba was making news in New York, where in 2014 it pulled off what was then the world’s largest IPO. Its stock soared 38% on the first day. In a CBS News interview aired shortly after the IPO, Ma said his method of dealing with authorities was to “never ever do business with government. Be in love with them, don’t marry them.”

By January 2015, Ma’s already chilly relationship with Chinese authorities hit a new low. The State Administration for Industry and Commerce released a report accusing Alibaba of hosting shady merchants, carrying counterfeit products, and even taking bribes and false advertising, saying the company had a “credibility crisis.”

The scathing report came on the heels of an appearance by Ma at the World Economic Forum in Davos, Switzerland, where he said he’d never share user data with Beijing unless it was investigating terrorism or other crimes. And it came a day after a letter addressed to the agency appeared on one of Alibaba’s official Weibo accounts complaining that government inspectors applied standards inconsistently and didn’t give merchants enough time to respond to accusations. The increasingly acrid dispute rattled investors, sending Alibaba’s share price tumbling.

To limit the crisis, Ma paid at least three visits to regulators, including making a speech at an internal meeting of the China Securities Regulatory Commission. In it, he acknowledged the need to tighten supervision and beseeched regulators with the argument that Alibaba wasn’t “too big to fail.”

The Industry and Commerce watchdog relented, issuing a letter later that month saying the views of certain officials weren’t shared by the administration, bringing the conflict to an end. A report criticizing the company didn’t have “judicial effect,” it said.

The episode bolstered investor confidence in Ma’s ability to navigate regulatory waters. For a period, it seemed he’d found the right balance when it came to picking battles with watchdogs.

“When you enter new fields without clear regulations, it is always a painful thing. They say, ‘Hey, my job is to regulate, not innovate. That’s your job,’ ” Ma told Bloomberg TV in 2017. “We have had terrible experiences, but we’ve learned how to work with regulators.”

The peace was broken in September of this year in the lead-up to Ant’s IPO. Heavyweight investors lined up for a piece of the financial-services powerhouse at a time when China’s banks were sacrificing profits to support an economy ravaged by the coronavirus pandemic.

As plans for the offering gathered steam-valuing the company at $315 billion-regulators pushed out a series of coordinated policies to curtail it, with Beijing blessing the abrupt halt to an IPO that was to trumpet China’s independence from U.S. capital markets. “It is not new that the party regulates everything, including private businesses and especially private financial businesses, as this had been … explicitly stated in China’s constitution,” says Zhiwu Chen, a finance professor and director of the Asia Global Institute at the University of Hong Kong. “But many private businessmen did not take this seriously. The recent Ant episode was a wake-up call.”

On Nov. 2, days before Ant’s scheduled IPO, Ma and his top executives were summoned before the nation’s main financial regulators in Beijing for a warning. The listing was halted the following day.

A joint task force has been set up to oversee Ant, led by the Financial Stability and Development Committee, a financial system regulator, along with various departments of the central bank and other regulators. The group is in frequent contact with Ant to collect data and other material, study its restructuring, and draft more rules for the industry.

While Ant hasn’t been given specific guidance on an overhaul, the overriding message is for the company to rethink its business, comply with new rules, and toe the line on increased scrutiny outlined for conglomerates operating in more than one financial sector.

In the process, Ant will need billions in additional capital and will likely lose one of two licenses that allow it to run its microlending platforms: Huabei (or “Just Spend”) and Jiebei (“Just Lend”). Its most lucrative business-extending about 1.7 trillion yuan in consumer credit as of June-will find less willing partners in banks and others as regulators criticize the relationships for leaving traditional lenders holding all the risk.

Institutions have been told to report on their co-lending with Ant, with some already seeking to shrink that exposure. Ant has said it retained only about 2% of loans on its own balance sheet as of June, with the rest funded by third parties or packaged as securities and sold off. “Fintech is a ‘winner takes all’ industry,” Guo Shuqing, China’s top banking regulator, said at a December conference. “With the advantage of data monopoly, big tech firms tend to hinder fair competition and seek excess profits.” Guo also promised to “encourage innovation while enhancing risk control.”

Ant’s own task force dealing with regulators, including Jing, its chairman, and CEO Simon Hu, has been providing almost daily updates to officials to buttress lines of communication. Executives await final guidelines for online lending and are bracing for further oversight in sectors such as insurance and wealth management.

The expected changes have narrowed the chances of Ant reviving its IPO before 2022, people familiar with the regulatory thinking said. Company executives remain optimistic that they’ll once again be able to appease the watchdogs and carry on, people familiar with the company said.

No tech mogul has succeeded in China without running afoul of regulators or stepping over their ever-shifting lines. Wang’s pre-Meituan venture, the Twitter-like Fanfou, was shut down in 2010 after being blamed for stoking violence in Xinjiang. In 2018, ByteDance’s Zhang shuttered his first breakout hit, a seemingly harmless app that collated jokes that were deemed too off-color. Beijing all but froze Tencent’s gaming empire, the world’s largest, that same year after President Xi’s government blamed addictive blockbusters such as Honour of Kings for myopia among youth.

Ma’s absence from public view-he hasn’t made any speeches since regulators halted the Ant IPO-is in sharp contrast with his previous jet-setting life, where he reveled in exchanging lighthearted banter with Nicole Kidman during Alibaba’s annual Singles Day shopping extravaganza or even appearing in his own Hollywood-style screen productions.

A devotee of legendary martial arts novelist Louis Cha, Ma starred three years ago in a short film as a kung fu master who dispatches the world’s top martial arts gurus one by one, Bruce Lee-style. Yet the movie ends with him being scolded by Chinese police for not knowing his place and trying to be No. 1. A humbled Ma falls over himself apologizing.

The film was intended to showcase Ma’s humorous side. But it also drove home the inconvenient truth that one of the richest businessmen in China will always be at the mercy of the ruling Communist Party.

“The current clampdown is just the next batch of businesspeople being reminded by the government: ‘You can be rich. You can have a powerful company. But you’ve got to play by our rules,’ ” says Andrew Polk, co-founder and head of economic research at Trivium China, a Beijing-based consulting firm. “For me, it’s less of a surprise that Jack is getting his comeuppance and more of a surprise that it took this long.”