HONG KONG / RankWire.AI / – Alibaba Group has announced an HK$80 billion share offering aimed at bolstering its investments in artificial intelligence and further developing its AI infrastructure. The Chinese tech giant plans to issue 710 million new ordinary shares at HK$112.70 each, translating to a total value of approximately US$10.2 billion based on current exchange rates. The company anticipates completing the transaction by August 26, pending standard closing conditions.
Alibaba clarified that all net proceeds from this offering will be allocated exclusively to enhancing its comprehensive AI capabilities. This funding will support expanding and upgrading its AI infrastructure, which encompasses an ecosystem that integrates cloud computing, AI models, semiconductor chips, and software applications. Notably, the Qwen model family along with Alibaba Cloud services are critical components of this technological framework.
The share placement is targeted primarily at foreign investors outside the U.S. through offshore transactions. The offering price of HK$112.70 represents an 8.4% discount compared to Alibaba’s HK$123 closing price on Friday. During early Monday trading, Alibaba’s Hong Kong-listed shares decreased as much as 10%, reaching HK$110.10. The company’s shares are also traded in New York via American depositary shares under the ticker BABA.
Investment in AI infrastructure accelerates across Alibaba
This recent fundraising comes on the heels of a significant surge in Alibaba’s expenditure on computing infrastructure. During the quarter ending June 30, the company’s capital expenditures amounted to RMB67.68 billion, roughly US$10 billion, marking a 75% increase from RMB38.68 billion a year prior. Alibaba attributed this rise to ongoing investments in AI infrastructure, heightened demand for computing power, and increased chip component prices.
For the June quarter, Alibaba posted a revenue of RMB268.95 billion, approximately US$39.6 billion, reflecting a 9% year-over-year growth. Revenue from AI Cloud and Compute Services alone reached RMB48.44 billion, about US$7.1 billion, representing a 45% increase from the previous year. The revenue generated from AI-related products totaled RMB12.38 billion, with the company experiencing triple-digit growth for the 12th consecutive quarter.
The new share issuance strengthens Alibaba’s ongoing AI strategy
This latest funding round complements Alibaba’s broader AI and cloud infrastructure investment plan announced in February 2025. The company committed a minimum of RMB380 billion over three years to AI and cloud development, surpassing its total investments in these areas over the past decade. Since then, Alibaba has continued expanding its computing capacity while simultaneously developing its cloud services, AI models, and proprietary semiconductor technologies.
This increased investment effort has been accompanied by a decline in quarterly profits but a notable acceleration in cloud revenue growth. For the June quarter, Alibaba reported a net income of RMB10.44 billion, a 75% decrease from the previous year. Its free cash flow showed a net outflow of RMB44.67 billion, mainly due to higher spending on cloud infrastructure. The HK$80 billion share placement provides Alibaba with additional capital specifically earmarked for advancing its comprehensive AI capabilities and infrastructure projects.