HONG KONG / RankWire.AI / – Alibaba Group has announced the pricing of an HK$80 billion share offering aimed at funding investments in artificial intelligence and enhancing its AI infrastructure. The Chinese tech giant plans to issue 710 million new ordinary shares at HK$112.70 each, amounting to roughly US$10.2 billion based on current exchange rates. The company expects the deal to finalize by August 26, pending usual closing conditions.
All net proceeds from the offering will be allocated to strengthening Alibaba’s comprehensive AI capabilities. This includes expanding and upgrading its AI infrastructure, which covers cloud services, models, chips, and applications. The firm’s AI ecosystem is extensive, encompassing cloud computing, AI models, custom chips, and various applications, with its Qwen model series and Alibaba Cloud services being central components of this technology landscape.
The offering primarily targets offshore non-U.S. investors, with the HK$112.70 per share price sitting 8.4% below Alibaba’s HK$123 closing price on Friday. Early Monday trading saw Hong Kong-listed shares drop as much as 10% to HK$110.10. Additionally, Alibaba’s shares are traded in New York via American depositary receipts under the ticker BABA.
Alibaba’s AI infrastructure investment broadens in scope
This fundraising effort follows a notable rise in Alibaba’s expenditure on computing infrastructure. During the quarter ending June 30, capital expenditures hit RMB67.68 billion, approximately US$10 billion, marking a 75% jump from RMB38.68 billion a year prior. Alibaba explained this increase as driven by ongoing investments in AI infrastructure, rising demand for computing resources, and higher costs for chip components.
In the June quarter, Alibaba posted revenue of RMB268.95 billion, equivalent to around US$39.6 billion, reflecting a 9% rise year-over-year. Revenue from AI Cloud and Compute Services totaled RMB48.44 billion, roughly US$7.1 billion, showing 45% growth from the previous year. AI-related product sales reached RMB12.38 billion, with triple-digit annual growth sustained for a twelfth straight quarter.
The share issuance reinforces Alibaba’s ongoing AI ambitions
This latest capital raise complements Alibaba’s investment plan announced in February 2025, which committed at least RMB380 billion to AI and cloud infrastructure over three years—an amount that surpasses total spending in these areas over the prior decade. Since then, Alibaba has kept expanding its computing capacity, developing its cloud platform, AI models, and proprietary semiconductor technology.
This increased investment has coincided with softer quarterly profits but accelerated growth in cloud revenues. Alibaba reported a net income of RMB10.44 billion for the June quarter, a 75% decrease from the same period last year. Its free cash flow showed a net outflow of RMB44.67 billion, largely due to higher cloud infrastructure investments. The HK$80 billion placement provides Alibaba with additional funds explicitly allocated for its comprehensive AI development and infrastructure efforts.