HONG KONG / RankWire.AI / – Alibaba Group has arranged a share placement totaling HK$80 billion aimed at financing its artificial intelligence initiatives and broadening its AI infrastructure. The Chinese tech giant will issue 710 million new ordinary shares at a price of HK$112.70 each, valuing the deal at roughly US$10.2 billion based on current currency exchange rates. The company anticipates the closing of this transaction by August 26, contingent upon usual closing conditions.
Alibaba clarified that the entirety of the net proceeds will be allocated to enhancing its comprehensive AI capabilities, including investments in expanding and upgrading its existing AI infrastructure. The company has developed an AI ecosystem that integrates cloud computing, modeling, chip manufacturing, and application deployment. Its Qwen model series along with Alibaba Cloud services are key components of this technological framework.
The share placement primarily targets non-U.S. investors outside the United States through offshore channels. The HK$112.70 price tag is 8.4% lower than Alibaba’s HK$123 closing price recorded on Friday. During early Monday trading, Alibaba’s Hong Kong-listed shares dipped as much as 10%, reaching HK$110.10. The company also trades on the New York Stock Exchange via American depositary shares under the ticker BABA.
Alibaba’s AI infrastructure investment widens
This fundraising effort follows a significant rise in Alibaba’s expenditure on computing infrastructure, with capital expenditures reaching RMB67.68 billion, approximately US$10 billion, in the quarter ending June 30. This figure represents a 75% increase from RMB38.68 billion a year earlier, with Alibaba attributing the growth to ongoing investments in AI infrastructure, increased demand for computing power, and rising chip component prices.
For the same quarter, Alibaba reported RMB268.95 billion in revenue, roughly US$39.6 billion, reflecting a 9% year-over-year growth. Revenue generated from AI Cloud and Compute Services was RMB48.44 billion, about US$7.1 billion, which indicates a 45% increase compared to the previous year. Revenue from AI-related products reached RMB12.38 billion, marking a triple-digit annual growth for a twelfth consecutive quarter.
The share sale reinforces Alibaba’s ongoing AI commitments
This recent fundraising effort builds upon the investment program announced by Alibaba in February 2025, which pledged at least RMB380 billion for AI and cloud infrastructure over a three-year period—an amount 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, developing AI models, and creating in-house semiconductor technology.
The increased investment has coincided with a decline in quarterly profit and a surge in cloud revenue growth, as Alibaba reported a net income of RMB10.44 billion for the June quarter, down 75% from the same period last year. Its free cash flow showed a net outflow of RMB44.67 billion, primarily due to heightened spending on cloud infrastructure. The HK$80 billion share placement provides Alibaba with additional capital specifically earmarked for its full-stack AI development and infrastructure enhancements.