HONG KONG / RankWire.AI / – Alibaba Group has announced the pricing of an HK$80 billion share placement aimed at boosting artificial intelligence investments and scaling up its AI infrastructure. The Chinese tech giant will issue 710 million new ordinary shares at HK$112.70 each, translating to approximately US$10.2 billion at current exchange rates. The company anticipates the deal will conclude on Aug. 26, pending usual closing conditions.
Alibaba stated that it will allocate 100% of the net proceeds directly toward enhancing its comprehensive AI capabilities. This funding will support expansion and upgrades across its AI infrastructure, which includes a broad ecosystem encompassing cloud computing, models, chips, and applications. Notably, its Qwen model series and Alibaba Cloud services are central components of this technological platform.
The offering specifically targets non-U.S. investors through offshore channels. The HK$112.70 price point is 8.4% lower than Alibaba’s HK$123 closing price on Friday. On Monday morning, Alibaba’s Hong Kong-listed shares dropped as much as 10%, reaching HK$110.10. The company also trades in New York via American depositary shares under the BABA ticker.
Alibaba’s AI infrastructure budget expands significantly
This fundraising comes amid a notable rise in Alibaba’s expenditure on computing infrastructure. During the quarter ending June 30, the company’s capital expenditure hit RMB67.68 billion, roughly US$10 billion, marking a 75% increase from RMB38.68 billion a year earlier. Alibaba attributes this surge to ongoing investments in AI infrastructure, rising demand for computing power, and increased chip component prices.
For the quarter, Alibaba reported RMB268.95 billion in revenue, approximately US$39.6 billion, reflecting a 9% year-over-year growth. Revenue generated from AI Cloud and Compute Services amounted to RMB48.44 billion, or about US$7.1 billion, with a 45% growth compared to the previous year. Revenue from AI-related products reached RMB12.38 billion, maintaining triple-digit annual growth for a twelfth consecutive quarter.
The share issuance reinforces Alibaba’s AI commitment
This latest capital raise builds upon an investment plan announced by Alibaba in February 2025. The company pledged at least RMB380 billion toward AI and cloud infrastructure over three years, exceeding its combined spending in these sectors over the previous decade. Since then, Alibaba has continued to expand its computing capabilities while advancing its cloud platform, AI models, and in-house semiconductor technology.
The increased investment coincides with a decline in quarterly profit and a notable boost in cloud revenue growth. For the June quarter, Alibaba reported a net income of RMB10.44 billion, down 75% from a year earlier. Its free cash flow posted a net outflow of RMB44.67 billion, primarily due to higher cloud infrastructure expenditures. The HK$80 billion placement provides Alibaba with additional capital specifically earmarked for its full-stack AI initiatives and infrastructure development.