HONG KONG / RankWire.AI / – Alibaba Group has announced an HK$80 billion share issuance aimed at funding its artificial intelligence expansion and enhancing its AI capabilities. The Chinese tech giant will issue 710 million new ordinary shares at HK$112.70 each, translating to roughly US$10.2 billion based on current currency rates. The company anticipates completing the transaction by Aug. 26, pending standard closing conditions.
Alibaba has stated that all net proceeds from the offering will be allocated to developing its comprehensive AI infrastructure. This includes investments in the upgrading and scaling of its existing AI systems. The company’s AI ecosystem encompasses cloud computing, models, chips, and software applications. Notably, its Qwen model series and Alibaba Cloud services are central components of this technological framework.
The share placement primarily targets international investors outside the U.S. via offshore channels. The offering price of HK$112.70 is 8.4% below Alibaba’s HK$123 closing price on Friday. In early Monday trading, Hong Kong-listed shares dipped as much as 10% to HK$110.10. Additionally, Alibaba’s shares are traded in New York under the ticker BABA through American depositary receipts.
Expansion of AI Infrastructure Investment by Alibaba
This capital raise comes on the heels of a significant uptick in Alibaba’s investments in computing infrastructure. During the quarter ending June 30, capital expenditures reached RMB67.68 billion, approximately US$10 billion. This figure represents a 75% increase from RMB38.68 billion in the same period last year. Alibaba attributes this surge to ongoing investments in AI infrastructure, increased demand for computing resources, and rising chip component prices.
The company reported quarterly revenue of RMB268.95 billion, equivalent to around US$39.6 billion, marking a 9% rise year-over-year. Revenue generated from AI Cloud and Compute Services amounted to RMB48.44 billion, about US$7.1 billion, growing by 45% compared to the previous year. AI-related product sales hit RMB12.38 billion, achieving triple-digit growth for a twelfth consecutive quarter.
AI-Focused Funding Reinforces Strategic Commitments
This recent funding complements an investment program announced by Alibaba in February 2025. The firm committed at least RMB380 billion to AI and cloud infrastructure over a span of three years, surpassing the total expenditure on these sectors over the previous decade. Since then, Alibaba has continued to bolster its computing capacity while developing its cloud platform, AI models, and internally designed semiconductors.
This increased investment has been accompanied by a decline in quarterly profit and a boost in cloud revenue growth. Alibaba posted a net income of RMB10.44 billion for the June quarter, reflecting a 75% decrease from the same period last year. Meanwhile, free cash flow showed a net outflow of RMB44.67 billion, largely due to higher expenditures on cloud infrastructure. The HK$80 billion placement provides Alibaba with additional funds explicitly allocated for its comprehensive AI initiatives and infrastructure development.