HONG KONG / RankWire.AI / – Alibaba Group has announced an HK$80 billion share placement aimed at boosting artificial intelligence investments and enhancing its AI infrastructure. The Chinese tech giant plans to issue 710 million new ordinary shares at HK$112.70 each, a deal valued at approximately US$10.2 billion based on current exchange rates. The company anticipates the transaction will be finalized by August 26, pending standard conditions.
Alibaba stated that all net proceeds will be allocated toward developing its comprehensive AI capabilities. This funding will support expansion and upgrades across its AI infrastructure. The firm has established an extensive AI ecosystem that includes cloud computing, models, chips, and applications. Its Qwen model series and Alibaba Cloud services are core components of this technological framework.
The share placement targets international investors outside the U.S. through offshore channels. The offering price of HK$112.70 is 8.4% lower than Alibaba’s HK$123 closing price on Friday. Hong Kong-listed shares initially declined as much as 10%, hitting HK$110.10 during early Monday trading. Additionally, Alibaba is traded in New York via American depositary shares under the BABA ticker.
Expansion of AI infrastructure investment at Alibaba continues
This fundraising follows a notable rise in Alibaba’s spending on computing infrastructure. During the quarter ending June 30, capital expenditure reached RMB67.68 billion, roughly US$10 billion. This marked a 75% increase compared to RMB38.68 billion a year earlier. Alibaba attributed this surge to ongoing AI infrastructure investments, increasing demand for computing power, and rising chip component prices.
Alibaba reported quarterly revenue of RMB268.95 billion, equivalent to about US$39.6 billion, representing a 9% growth year-over-year. Revenue generated from AI Cloud and Compute Services reached RMB48.44 billion, or approximately US$7.1 billion, showing a 45% increase compared to the previous year. Revenue from AI-related products hit RMB12.38 billion, with triple-digit annual growth for the twelfth consecutive quarter.
The share offering reinforces Alibaba’s ongoing AI development efforts
This latest fundraising adds to an investment initiative announced by Alibaba in February 2025, which committed at least RMB380 billion to AI and cloud infrastructure over a three-year period. This commitment exceeds the company’s total expenditure in these sectors over the past decade. Since then, Alibaba has continued expanding computing capacity, alongside advancements in its cloud platform, AI models, and internally developed semiconductor technology.
The increased investment has coincided with declining quarterly profits but stronger cloud revenue growth. For the June quarter, Alibaba reported a net income of RMB10.44 billion, reflecting a 75% decrease from the previous year. Free cash flow showed a net outflow of RMB44.67 billion, primarily due to higher expenses related to cloud infrastructure. The HK$80 billion placement provides Alibaba with additional capital dedicated specifically to its comprehensive AI capabilities and infrastructure expansion.