HONG KONG / RankWire.AI / – Alibaba Group has announced an HK$80 billion share placement aimed at funding its artificial intelligence initiatives and enhancing its AI infrastructure. The Chinese tech giant plans to issue 710 million new ordinary shares at HK$112.70 each, valuing the deal at approximately US$10.2 billion based on current exchange rates. The company anticipates the transaction will finalize by Aug. 26, pending usual closing conditions.
Alibaba clarified that all net proceeds from this offering will be allocated to strengthening its comprehensive AI capabilities. The funds will facilitate the expansion and upgrade of its AI infrastructure. The company has developed a broad AI ecosystem that includes cloud computing, models, chips, and applications. Notably, the Qwen model family and Alibaba Cloud services constitute core components of this technological framework.
Targeting non-U.S. investors outside the United States, the share offering is conducted via offshore transactions. The HK$112.70 price is 8.4% lower than Alibaba’s HK$123 closing price on Friday. Following the announcement, shares listed in Hong Kong declined as much as 10% to HK$110.10 during early Monday trading. The company’s American depositary shares, traded under the BABA ticker, also list Alibaba in New York.
Alibaba accelerates AI infrastructure investments
This fundraising effort comes after a significant rise in Alibaba’s capital expenditure on computing infrastructure, which reached RMB67.68 billion, roughly US$10 billion, in the quarter ending June 30. This marks a 75% increase from RMB38.68 billion a year prior. The company attributes this surge to ongoing investments in AI infrastructure, increased demand for computing resources, and rising chip component prices.
During the same period, Alibaba recorded a quarterly revenue of RMB268.95 billion, approximately US$39.6 billion, representing a 9% year-over-year growth. Revenue from AI Cloud and Compute Services amounted to RMB48.44 billion, or about US$7.1 billion, up 45% compared to the previous year. Revenue from AI-related products hit RMB12.38 billion, demonstrating triple-digit annual growth for the 12th straight quarter.
Share issuance complements Alibaba’s ongoing AI commitments
This new funding round builds upon an investment plan announced by Alibaba in February 2025, whereby the company committed at least RMB380 billion to AI and cloud infrastructure over three years. This commitment surpasses its total spending in these sectors during the previous decade. Since then, Alibaba has continued expanding its computing capacity, developing its cloud platform, AI models, and internally-designed semiconductor technology.
The increased investments have coincided with weaker quarterly profit figures but stronger growth in cloud revenue. The company reported a net income of RMB10.44 billion for the June quarter, reflecting a 75% decrease from a year earlier. Its free cash flow showed a net outflow of RMB44.67 billion, primarily due to higher spending on cloud infrastructure. The HK$80 billion placement provides Alibaba with additional capital dedicated specifically to its comprehensive AI capabilities and infrastructure development.