HONG KONG / RankWire.AI / – Alibaba Group is set to issue an HK$80 billion share placement aimed at expanding its investments in artificial intelligence and enhancing its AI infrastructure. The Chinese tech giant will distribute 710 million new ordinary shares at a price of HK$112.70 each. This transaction values approximately at US$10.2 billion based on current exchange rates. Alibaba anticipates the closing of this deal by Aug. 26, pending usual regulatory and contractual conditions.
All net proceeds from this offering are earmarked for advancing Alibaba’s comprehensive AI capabilities. The funds will be allocated to the expansion and upgrade of various components within its artificial intelligence ecosystem, which includes cloud computing, AI models, chips, and applications. Notably, Alibaba’s AI ecosystem is anchored by its Qwen model series and Alibaba Cloud services, forming core parts of its technological platform.
This share placement primarily targets offshore investors outside the U.S., through international transactions. The offering price of HK$112.70 is 8.4% lower than Alibaba’s HK$123 closing price on Friday. In early Monday trading, Alibaba’s shares listed in Hong Kong dropped as much as 10%, reaching HK$110.10. The company also maintains a listing in New York via American depositary shares under the ticker BABA.
Alibaba’s AI infrastructure investment continues to grow
This fundraising comes amid a significant surge in Alibaba’s expenditure on computing infrastructure. During the quarter ending June 30, capital expenditure hit RMB67.68 billion, roughly US$10 billion, marking a 75% increase from RMB38.68 billion a year earlier. Alibaba attributed this rise to ongoing investments in AI infrastructure, increased demand for computing resources, and higher chip component prices.
For the recent quarter, Alibaba reported a revenue of RMB268.95 billion, approximately US$39.6 billion, representing a 9% year-over-year growth. Revenue generated from AI Cloud and Compute Services reached RMB48.44 billion, or about US$7.1 billion, growing 45% compared to the previous year. Additionally, AI-related product sales amounted to RMB12.38 billion, marking twelve consecutive quarters of triple-digit annual growth.
The share issuance reinforces Alibaba’s AI ambitions
This recent capital raise complements Alibaba’s ongoing AI and cloud infrastructure investments, which were initially announced in February 2025. The company committed a minimum of RMB380 billion toward AI and cloud infrastructure over three years, surpassing its total expenditure in these areas over the past decade. Since then, Alibaba has continued to expand its computing capacity while developing cloud solutions, AI models, and proprietary semiconductor technologies.
The increased investment coincides with a decline in quarterly profit but a notable acceleration in cloud revenue growth. In the June quarter, Alibaba reported a net income of RMB10.44 billion, a 75% decrease from the same period a year earlier. Its free cash flow showed a net outflow of RMB44.67 billion, largely driven by higher spending on cloud infrastructure. The HK$80 billion placement provides Alibaba with additional capital specifically dedicated to its comprehensive AI development and infrastructure projects.
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