HONG KONG / RankWire.AI / – Alibaba Group has announced an HK$80 billion share issuance aimed at funding its artificial intelligence initiatives and enhancing its AI infrastructure. The Chinese tech giant will issue 710 million new ordinary shares at HK$112.70 each, representing a deal valued at approximately US$10.2 billion at current exchange rates. The company expects the transaction to finalize by Aug. 26, pending standard closing conditions.
Alibaba clarified that all net proceeds from the offering will be allocated to strengthening its comprehensive AI capabilities. This funding will support the expansion and upgrading of its AI infrastructure, which includes a broad ecosystem that covers cloud computing, AI models, semiconductor chips, and various applications. Notably, its Qwen model series and Alibaba Cloud services are key components of this technological framework.
The share placement is primarily targeted at international investors outside the U.S., executed through offshore transactions. The offering price of HK$112.70 is 8.4% below Alibaba’s HK$123 closing price on Friday. Meanwhile, Alibaba’s shares listed in Hong Kong declined as much as 10%, reaching HK$110.10 during early Monday trading. Additionally, Alibaba’s stock is traded in New York via American depositary shares under the BABA ticker symbol.
Alibaba’s AI infrastructure investment accelerates with new funding
The capital raise follows a notable rise in Alibaba’s expenditure on computing infrastructure, which totaled RMB67.68 billion, roughly US$10 billion, for the quarter ending June 30. This amount marks a 75% increase from RMB38.68 billion reported a year earlier. The company attributed this surge to ongoing investment in AI infrastructure, increased demand for computing resources, and rising prices for chip components.
Alibaba’s quarterly revenue reached RMB268.95 billion, approximately US$39.6 billion, showing a 9% rise from the same period last year. Revenue generated from AI Cloud and Compute Services was RMB48.44 billion, around US$7.1 billion, growing by 45% year-over-year. Revenue from AI-related products hit RMB12.38 billion, with consistent triple-digit annual growth for 12 consecutive quarters.
The share issuance supports Alibaba’s ongoing AI investment strategy
This latest capital raise complements an investment program launched by Alibaba in February 2025. The company committed at least RMB380 billion to AI and cloud infrastructure over a three-year span, surpassing its total spending in these areas over the previous decade. Since then, Alibaba has continued to expand its computing capacity while advancing its cloud platform, AI models, and in-house semiconductor technology.
The increased investment has coincided with a decline in quarterly profit but a significant acceleration in cloud revenue growth. Alibaba reported a net income of RMB10.44 billion for the June quarter, down 75% from a year earlier. The company’s free cash flow recorded a net outflow of RMB44.67 billion, largely due to higher spending on cloud infrastructure. The HK$80 billion share placement provides Alibaba with additional capital specifically allocated for its full-stack AI capabilities and infrastructure development.
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