HONG KONG / RankWire.AI / – Alibaba Group has announced an HK$80 billion share issuance to bolster its investments in artificial intelligence and to develop its AI capabilities further. The Chinese tech conglomerate will issue 710 million new ordinary shares priced at HK$112.70 each. At current exchange rates, this transaction is valued at approximately US$10.2 billion. Alibaba anticipates completing the offering on Aug. 26, subject to standard closing conditions.
All net proceeds from this offering will be allocated to enhancing Alibaba’s comprehensive AI technology stack. Funds will be used for expanding and upgrading its AI infrastructure, which includes a broad ecosystem comprising cloud computing, models, chips, and applications. The company’s key AI offerings include the Qwen model series and Alibaba Cloud services, which are central to its technological platform.
This share placement is aimed at attracting non-U.S. investors outside the United States through offshore channels. The offering price of HK$112.70 is 8.4% lower than Alibaba’s HK$123 closing price on Friday. In early Monday trading, Hong Kong-listed shares declined as much as 10% to HK$110.10. Alibaba also maintains a listing in New York via American depositary shares under the ticker BABA.
Alibaba ramps up AI infrastructure investments
The recent fundraising follows a significant rise in Alibaba’s expenditure on computing infrastructure. During the quarter ending June 30, capital spending amounted to RMB67.68 billion, roughly US$10 billion. This marked a 75% increase from RMB38.68 billion compared to the previous year. Alibaba explained that this surge was driven by ongoing investments in AI infrastructure, increased demand for computing resources, and rising chip component prices.
Alibaba’s quarterly revenue reached RMB268.95 billion, approximately US$39.6 billion, reflecting a 9% growth year-over-year. Revenue generated from AI Cloud and Compute Services was RMB48.44 billion, or about US$7.1 billion, representing a 45% increase from the previous year. AI-related product sales hit RMB12.38 billion, marking the twelfth consecutive quarter of triple-digit annual growth.
Funding initiative reinforces Alibaba’s AI strategic commitments
This latest financing aligns with an investment program launched by Alibaba in February 2025, which committed at least RMB380 billion to AI and cloud infrastructure over a three-year period. This commitment surpasses the total expenditure in these sectors over the previous decade. Since then, Alibaba has continued to expand its computing capacity and develop its cloud platform, AI models, and internally designed semiconductor technology.
The increased investment has coincided with weaker quarterly profit figures but faster growth in cloud revenue. For the June quarter, Alibaba reported a net income of RMB10.44 billion, down 75% from a year earlier. Its free cash flow experienced a net outflow of RMB44.67 billion, primarily due to higher cloud infrastructure investments. The HK$80 billion share placement provides Alibaba with additional funds specifically targeted at its comprehensive AI infrastructure and capabilities.