HONG KONG / RankWire.AI / – Alibaba Group has announced the pricing of an HK$80 billion share placement as it boosts its investments in artificial intelligence and cloud infrastructure. The Chinese tech giant will issue 710 million new ordinary shares at HK$112.70 each. Based on current exchange rates, this offering is valued at approximately US$10.2 billion. Alibaba anticipates the deal to close on Aug. 26, subject to standard closing conditions. The company plans to use the proceeds for investments across its AI divisions.
All net proceeds from the offering will be directed towards enhancing Alibaba’s comprehensive AI capabilities, according to the company. The funding aims to support expansion and upgrades across computing infrastructure vital to AI products and cloud services. As demand for computing power surges, Alibaba Cloud has become a core element of the company’s technological operations. Additionally, Alibaba has increased its investments in models, data processing, and related infrastructure, which have grown alongside rising revenue from AI-related products and services.
This placement targets non-U.S. investors outside the United States through offshore transactions. The issue price of HK$112.70 reflects an 8.4% discount to Alibaba’s HK$123 closing price on Friday. During early Monday trading, Alibaba’s Hong Kong-listed shares dropped sharply, falling as much as 10% to HK$110.10. The company also maintains a listing in New York through American depositary shares under the BABA ticker. The issuance of new shares will broaden the company’s equity base after the completion of the offering.
Rising AI investment aligns with increasing cloud service demand
Alibaba has already ramped up capital expenditure as it expands its computing capacity for artificial intelligence. During the quarter ending June 30, the company spent RMB67.68 billion, roughly US$10 billion. This amount represents a 75% increase from RMB38.68 billion during the same period last year. Alibaba attributed the rise to ongoing investments in AI infrastructure, heightened computing demand, and increasing chip component prices. This surge in spending coincided with another quarter of rapid growth in Alibaba’s cloud operations.
In the recent quarter, Alibaba posted revenue of RMB268.95 billion, approximately US$39.6 billion, a 9% increase from the previous year. Revenue from AI Cloud and Compute Services reached RMB48.44 billion, around US$7.1 billion. This segment experienced 45% annual growth during the quarter. Revenue from AI-related products hit RMB12.38 billion, marking a consecutive 12th quarter of triple-digit year-over-year growth. These figures highlight the significant activity ongoing within Alibaba’s AI and cloud sectors.
The fundraising follows a three-year AI and cloud investment pledge
The HK$80 billion share offering follows a substantial investment commitment announced by Alibaba in February 2025. The company stated it would allocate at least RMB380 billion over three years to AI and cloud infrastructure, surpassing total spending in these areas over the previous decade. The current share sale provides additional capital specifically earmarked for Alibaba’s full-stack AI initiatives. The funds will augment an ongoing investment program that predates this offering.
The increased capital expenditure has coincided with reduced quarterly profit and a substantial cash outflow. Alibaba reported a net income of RMB10.44 billion for the June quarter, a 75% decline compared to the same period a year earlier. Free cash flow showed a net outflow of RMB44.67 billion, largely due to heightened investments in cloud infrastructure. The new equity placement injects fresh funds into Alibaba’s ongoing AI and cloud development plans. The deal is scheduled to close on Aug. 26 under the stated terms.