HONG KONG / RankWire.AI / – Alibaba Group has completed a HK$80 billion share placement aimed at increasing investments in artificial intelligence and cloud technology. The Chinese tech giant will issue 710 million new ordinary shares at HK$112.70 each. The total offering value amounts to approximately US$10.2 billion based on current exchange rates. Alibaba anticipates the transaction to finalize on Aug. 26, pending customary closing conditions. The funds are designated for boosting its AI initiatives and infrastructure investments.
All net proceeds from the offering will be allocated to enhance Alibaba’s comprehensive artificial intelligence capabilities, the company stated. The planned expenditure covers expanding and upgrading computing infrastructure that underpins its AI products and cloud services. As demand for computing power surges, Alibaba Cloud has become a core element of the company’s technological operations. The group is also ramping up spending on models, data processing, and related infrastructure, with these investments growing alongside increasing revenue from AI-powered 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 to Alibaba’s HK$123 closing price on Friday. During early Monday trading, Alibaba’s Hong Kong-listed shares fell sharply, dropping as much as 10% to HK$110.10. The company also maintains a listing in New York via American depositary shares under the BABA ticker. The newly issued shares will expand Alibaba’s equity base following the completion of the offering.
Growth in AI investments driven by rising cloud demand
As it scales up computing capacity for artificial intelligence, Alibaba has already increased its capital expenditures. During the quarter ending June 30, capital expenditure totaled RMB67.68 billion, roughly US$10 billion, representing a 75% rise from RMB38.68 billion in the same period last year. The company attributes this surge to ongoing investments in AI infrastructure, heightened demand for computing services, and rising chip component prices. This increase coincides with another quarter of rapid growth in its cloud business.
The company’s quarterly revenue reached RMB268.95 billion, approximately US$39.6 billion, marking a 9% year-over-year increase. Revenue from AI Cloud and Compute Services amounted to RMB48.44 billion, or about US$7.1 billion, with annual growth of 45% during this period. Revenue from AI-related products hit RMB12.38 billion, achieving triple-digit year-on-year growth for the twelfth consecutive quarter. These figures illustrate the significant scale of activity already underway within Alibaba’s AI and cloud divisions.
The share offering follows a three-year AI and cloud investment plan
Following a major investment commitment announced in February 2025, Alibaba has now raised HK$80 billion through this placement. The firm stated it plans to spend at least RMB380 billion on AI and cloud infrastructure over the next three years, exceeding its combined expenditure in those sectors over the past decade. The current share sale provides additional capital specifically earmarked for expanding Alibaba’s full-stack AI capabilities. These funds will support an ongoing investment program that predates this offering.
Increased capital expenditures have been accompanied by reduced quarterly profit and significant cash outflows. For the June quarter, Alibaba reported a net income of RMB10.44 billion, down 75% from the same period last year. Free cash flow showed a net outflow of RMB44.67 billion, mainly due to heightened investment in cloud infrastructure. The latest equity issuance adds fresh funds while Alibaba continues executing its previously announced AI and cloud investment strategy. The completion is scheduled for Aug. 26 under the agreed closing conditions.