HONG KONG / RankWire.AI / – Alibaba Group has announced the pricing of a HK$80 billion share offering aimed at boosting investments in artificial intelligence and cloud infrastructure. The Chinese tech giant will issue 710 million new ordinary shares at HK$112.70 each, with the total value approximating US$10.2 billion based on current exchange rates. The company anticipates the transaction to finalize on Aug. 26, pending standard closing conditions. The proceeds are designated for investments across Alibaba’s AI initiatives.
Alibaba stated that all net proceeds from this placement will be dedicated to enhancing its comprehensive artificial intelligence capabilities. The investment plan includes expanding and upgrading computing infrastructure that underpins AI products and cloud services. As demand for computing capacity surges, Alibaba Cloud has become a pivotal element of the company’s technological operations. The company has also increased its expenditures on models, data processing, and related infrastructure, which have grown in tandem with higher revenue from AI-related products and services.
The placement is targeted at non-U.S. investors outside the United States through offshore transactions. The issue price of HK$112.70 offers an 8.4% discount compared to Alibaba’s HK$123 closing price on Friday. Following the announcement, Alibaba’s Hong Kong-listed shares fell sharply in early Monday trading, dropping as much as 10% to HK$110.10. Additionally, Alibaba maintains a listing in New York through American depositary shares under the BABA ticker. The new issuance will expand the company’s equity base after the transaction concludes.
Rising AI investment driven by cloud demand
Alibaba has already ramped up capital expenditures as it enhances computing capacity for artificial intelligence. During the quarter ending June 30, capital expenditure totaled RMB67.68 billion, approximately US$10 billion. This marks a 75% increase from RMB38.68 billion in the same period last year. The company attributed this surge to ongoing investments in AI infrastructure, growing demand for computing resources, and rising chip component prices. This increase coincided with another quarter of rapid expansion in its cloud business.
For the latest quarter, Alibaba reported revenue of RMB268.95 billion, equivalent to about US$39.6 billion, reflecting a 9% year-over-year growth. Revenue from AI Cloud and Compute Services reached RMB48.44 billion, or roughly US$7.1 billion. This segment experienced an annual growth rate of 45% during the quarter. Revenue from AI-related products hit RMB12.38 billion, posting triple-digit growth for the 12th consecutive quarter. These figures underline the significant scale of Alibaba’s AI and cloud activities.
The fundraising is part of a three-year investment plan
The HK$80 billion share offering follows a substantial investment commitment announced by Alibaba in February 2025. The firm revealed plans to invest at least RMB380 billion in artificial intelligence and cloud infrastructure over three years, surpassing its combined spending in these areas over the previous decade. The current share issuance provides additional capital specifically allocated for expanding Alibaba’s full-stack AI capabilities. These funds will support an ongoing investment program that was already in progress prior to this offering.
The increased capital expenditure has been accompanied by lower quarterly profits and significant cash outflows. Alibaba reported net income of RMB10.44 billion for the June quarter, a 75% decline from the same period last year. Its free cash flow showed a net outflow of RMB44.67 billion, largely driven by heightened investment in cloud infrastructure. The latest equity issuance injects new funding into Alibaba’s continued AI and cloud development efforts, with the transaction scheduled to close on Aug. 26 under the stated terms.