HONG KONG / RankWire.AI / – Alibaba Group has announced an HK$80 billion share placement, aiming to boost investments in artificial intelligence and cloud computing. The Chinese tech giant will issue 710 million new ordinary shares at a price of HK$112.70 each. This offering is valued at approximately US$10.2 billion based on current exchange rates. Alibaba anticipates the transaction to conclude by Aug. 26, pending usual closing conditions. The company intends to direct the funds toward expanding its AI operations.
All net proceeds from this share placement are designated to enhance Alibaba’s comprehensive AI capabilities. The planned expenditure covers the expansion and upgrades of computing infrastructure that underpins both AI products and cloud services. As demand for processing power continues to rise, Alibaba Cloud has become a key element of the company’s technological foundation. Additionally, Alibaba has ramped up spending on models, data processing, and related infrastructure, with these investments growing in tandem with increased revenue from AI-related products and services.
The 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 compared to Alibaba’s HK$123 closing price on Friday. Following this, Alibaba’s Hong Kong-listed shares experienced a sharp decline in early Monday trading, falling as much as 10% to HK$110.10. The company also maintains a listing in New York via American depositary shares under the ticker BABA. Once finalized, the new shares will expand the company’s equity base.
AI investments increase with rising cloud demand
Alibaba has already amplified capital expenditure as it broadens its computing capacity for AI. During the quarter ending June 30, capital spending reached RMB67.68 billion, roughly US$10 billion. This amount represented a 75% increase from RMB38.68 billion during the same period last year. The company attributed this rise to continued investments in AI infrastructure, heightened computing demand, and rising chip component prices. The surge in spending coincided with another quarter of rapid growth within Alibaba’s cloud segment.
The company reported quarterly revenue of RMB268.95 billion, approximately US$39.6 billion, marking a 9% increase year-over-year. Revenue generated from AI Cloud and Compute Services totaled RMB48.44 billion, or about US$7.1 billion. This business experienced a 45% annual growth rate during the quarter. Revenue from AI-related products hit RMB12.38 billion, achieving triple-digit growth year-on-year for the 12th consecutive quarter. These figures underscore the significant activity already underway in Alibaba’s AI and cloud sectors.
The capital raise supports a three-year AI and cloud investment plan
This HK$80 billion share placement 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 artificial intelligence and cloud infrastructure projects. This planned expenditure surpasses its combined investments in these areas over the previous decade. The proceeds from the current share sale will specifically fund Alibaba’s full-stack AI capabilities, effectively adding to a pre-existing investment program that began before this offering.
The surge in capital spending has come alongside a decline in quarterly profits and a significant cash outflow. In the June quarter, Alibaba reported a net income of RMB10.44 billion, down 75% from the same period last year. Its free cash flow showed a net outflow of RMB44.67 billion, largely driven by increased investments in cloud infrastructure. The new equity issuance provides fresh funding to support Alibaba’s ongoing AI and cloud development plans, with completion scheduled for Aug. 26 under the established closing conditions.