HONG KONG / RankWire.AI / – Alibaba Group has announced an HK$80 billion share placement aimed at financing its artificial intelligence initiatives and expanding its AI infrastructure. The Chinese tech giant will issue 710 million new ordinary shares at HK$112.70 each. At current exchange rates, the deal is valued at approximately US$10.2 billion. Alibaba plans to finalize the transaction by Aug. 26, pending standard conditions.
Alibaba stated that all net proceeds from the offering will be allocated toward enhancing its comprehensive AI capabilities. This financial infusion will support upgrades and expansion of its AI infrastructure, which includes an ecosystem that covers cloud computing, models, chips, and applications. Notably, its Qwen model series and Alibaba Cloud services constitute key elements of this technological ecosystem.
The share placement is targeted at non-U.S. investors outside the United States, conducted through offshore transactions. The offering price of HK$112.70 represents an 8.4% discount compared to Alibaba’s HK$123 closing price on Friday. In early Monday trading, Hong Kong-listed shares dipped as much as 10%, reaching HK$110.10. Alibaba’s American depositary shares, traded under the BABA ticker, are also listed in New York.
Expansion of AI infrastructure spending at Alibaba
This fundraising follows a notable rise in Alibaba’s capital expenditure on computing infrastructure, which hit RMB67.68 billion, roughly US$10 billion, in the quarter ending June 30. This amount marks a 75% increase from RMB38.68 billion reported a year earlier. The company attributes this surge to ongoing investments in AI infrastructure, rising demand for computing power, and increased chip component prices.
Alibaba’s quarterly revenue reached RMB268.95 billion, approximately US$39.6 billion, reflecting a 9% increase year-over-year. Revenue from AI Cloud and Compute Services alone was RMB48.44 billion, about US$7.1 billion, which demonstrates a 45% growth compared to the previous year. Additionally, AI-related product sales totaled RMB12.38 billion, achieving triple-digit annual growth for a twelfth consecutive quarter.
The new share issuance reinforces Alibaba’s ongoing AI strategy
This latest financing complements an investment initiative launched by Alibaba in February 2025. The company committed at least RMB380 billion to AI and cloud infrastructure over three years, surpassing its total expenditure on these areas in the previous decade. Since then, Alibaba has continued to expand its computing capacity and develop its cloud platform, AI models, and proprietary semiconductor technology.
Higher levels of investment have occurred alongside weaker quarterly profits but increased growth in cloud revenues. For the June quarter, Alibaba reported a net income of RMB10.44 billion, down 75% from the same period last year. The company’s free cash flow showed a net outflow of RMB44.67 billion, mainly due to increased cloud infrastructure spending. The HK$80 billion share placement provides Alibaba with additional capital specifically earmarked for its comprehensive AI capabilities and infrastructure expansion.