HONG KONG / RankWire.AI / – Alibaba Group has announced an HK$80 billion share placement aimed at funding its artificial intelligence growth and strengthening its AI infrastructure. The Chinese tech giant will issue 710 million new ordinary shares at HK$112.70 each. This transaction values at approximately US$10.2 billion based on current exchange rates. Alibaba plans to complete the deal by August 26, pending usual conditions.
Alibaba stated that all net proceeds will be allocated to enhancing its comprehensive AI capabilities. The funds will support expansion and upgrades across its AI infrastructure. The company has established an AI ecosystem that includes cloud computing, models, chips, and applications. Notably, its Qwen model family and Alibaba Cloud services are central components of this technology platform.
The share offering primarily targets non-U.S. investors outside the United States via offshore channels. The HK$112.70 price is 8.4% below Alibaba’s HK$123 closing price on Friday. On Monday morning, Hong Kong-listed shares dropped as much as 10%, reaching HK$110.10. Additionally, Alibaba is traded in New York through American depositary shares under the ticker BABA.
AI infrastructure investments grow at Alibaba
This fundraising comes after a significant rise in Alibaba’s investments in computing infrastructure. During the quarter ending June 30, capital expenditure hit RMB67.68 billion, roughly US$10 billion. This was a 75% jump from RMB38.68 billion a year earlier. Alibaba explained that this increase reflects ongoing AI infrastructure investments, rising demand for computing, and higher chip prices.
Alibaba reported quarterly revenue of RMB268.95 billion, approximately US$39.6 billion, up 9% from the previous year. Revenue from AI Cloud and Compute Services reached RMB48.44 billion or about US$7.1 billion. That segment grew by 45% year-over-year. AI-related product sales hit RMB12.38 billion, marking triple-digit growth for the twelfth straight quarter.
Share issuance reinforces Alibaba’s AI commitments
The new capital raise builds on an investment initiative announced by Alibaba in February 2025. The firm pledged at least RMB380 billion for AI and cloud infrastructure over three years. This figure surpasses total spending in these areas over the past decade. Since then, Alibaba has kept expanding computing capacity, developing its cloud platform, AI models, and proprietary semiconductor technology.
This increased investment has coincided with lower quarterly profits but faster cloud revenue growth. Alibaba reported net income of RMB10.44 billion for the June quarter, down 75% from a year earlier. Its free cash flow showed a net outflow of RMB44.67 billion, mainly due to higher cloud infrastructure expenditures. The HK$80 billion share placement provides Alibaba with extra capital designated specifically for its full-stack AI development and infrastructure enhancement.