HONG KONG / RankWire.AI / – Alibaba Group has announced an HK$80 billion share offering to finance its artificial intelligence expansion and enhance its AI infrastructure. The Chinese tech giant will issue 710 million new ordinary shares priced at HK$112.70 each. This transaction is valued at approximately US$10.2 billion based on current exchange rates. Alibaba projects that the deal will finalize by Aug. 26, contingent upon usual closing conditions.
All net proceeds from this issuance will be allocated to further developing Alibaba’s comprehensive AI capabilities. The company’s plans include broadening and upgrading its AI infrastructure. Its AI ecosystem encompasses cloud computing, models, chips, and various applications, with the Qwen model family and Alibaba Cloud services being key elements of the platform.
The share placement primarily targets non-U.S. investors through offshore channels. The offering price of HK$112.70 is 8.4% lower than Alibaba’s HK$123 closing price on Friday. Early Monday trading saw Hong Kong-listed shares fall as much as 10% to HK$110.10. Alibaba also has a listing in New York under the BABA ticker, traded via American depositary shares.
Expansion of AI infrastructure investment at Alibaba continues
This fundraising effort follows a notable increase in Alibaba’s capital spending on computing infrastructure, which hit RMB67.68 billion—roughly US$10 billion—in the quarter ending June 30. This amount marked a 75% jump from RMB38.68 billion a year prior. The company links this surge to ongoing investments in AI infrastructure, rising demand for computing power, and increased chip component prices.
Alibaba’s quarterly revenue reached RMB268.95 billion, about US$39.6 billion, reflecting a 9% growth compared to the previous year. Revenue from AI Cloud and Compute Services totaled RMB48.44 billion (around US$7.1 billion), rising 45% year-over-year. AI product revenue specifically hit RMB12.38 billion, maintaining triple-digit annual growth for twelve consecutive quarters.
New share issuance reinforces Alibaba’s ongoing AI investments
This recent capital raise builds upon a funding initiative launched by Alibaba in February 2025. The company committed at least RMB380 billion towards AI and cloud infrastructure over three years, surpassing total expenditures in these sectors during the previous decade. Since then, Alibaba has continued expanding its computing capacity and developing its cloud platform, AI models, and proprietary semiconductor technology.
The increased investment coincides with declining quarterly profits but faster growth in cloud revenue. The company reported a net income of RMB10.44 billion for the June quarter, down 75% from a year earlier. Additionally, free cash flow showed a net outflow of RMB44.67 billion, primarily due to higher cloud infrastructure costs. The HK$80 billion share placement provides Alibaba with additional capital specifically dedicated to scaling its full-stack AI capabilities and infrastructure.