HONG KONG / RankWire.AI / – Alibaba Group has announced the pricing of a HK$80 billion share issuance as part of its strategy to ramp up investment in artificial intelligence and cloud infrastructure. The Chinese tech giant will issue 710 million new ordinary shares at HK$112.70 each, translating to approximately US$10.2 billion at current exchange rates. The company expects the transaction to finalize on Aug. 26, subject to standard closing conditions. The funds are designated for expanding its AI operations.
Alibaba stated that all net proceeds from this offering will be used to strengthen its comprehensive artificial intelligence capabilities. This includes expanding and upgrading computing infrastructure that underpins AI products and cloud services. As demand for computing capacity surges, Alibaba Cloud has become a vital element of the company’s technological backbone. The firm has also increased investments in models, data processing, and related infrastructure. These investments have been growing in tandem with rising revenue from AI-related products and services.
This placement targets non-U.S. investors outside the United States through offshore channels. The issue price of HK$112.70 reflects an 8.4% discount to Alibaba’s HK$123 closing price on Friday. Following this, Alibaba’s Hong Kong-listed shares declined sharply in early Monday trading, falling as much as 10% to HK$110.10. The company also maintains a listing on the New York Stock Exchange via American depositary shares under the ticker BABA. The new shares will increase Alibaba’s total equity once the offering concludes.
AI investments grow alongside cloud service demand
Alibaba has already ramped up capital expenditure to support expanding AI computing capacity. During the quarter ending June 30, capital expenditure reached RMB67.68 billion, roughly US$10 billion, marking a 75% increase from RMB38.68 billion in the same period last year. The rise is attributed to ongoing investments in AI infrastructure, heightened demand for computing power, and rising chip component costs. These spending increases coincided with another quarter of rapid growth in Alibaba’s cloud services.
Alibaba reported quarterly revenues of RMB268.95 billion, equivalent to approximately US$39.6 billion, reflecting a 9% increase year-over-year. Revenue from AI Cloud and Compute Services alone totaled RMB48.44 billion, about US$7.1 billion. That segment experienced 45% annual growth in the quarter. Revenue from AI-related products reached RMB12.38 billion and has shown triple-digit growth for 12 consecutive quarters, illustrating the significant activity ongoing within Alibaba’s AI and cloud sectors.
Funds raised align with three-year AI and cloud investment plan
The HK$80 billion share placement follows a major investment commitment announced by Alibaba in February 2025. The company revealed plans to spend at least RMB380 billion on artificial intelligence and cloud infrastructure over the next three years—an amount that surpasses its combined spending in these areas over the previous decade. This current offering provides additional capital specifically allocated to its comprehensive AI development, supporting an investment initiative already in progress prior to this issuance.
The increase in capital expenditure has come amid declining quarterly profits and substantial cash outflows. Alibaba reported a net income of RMB10.44 billion for the June quarter, down 75% from the same period last year. Free cash flow showed a net outflow of RMB44.67 billion, mainly due to intensified investment in cloud infrastructure. The new equity issuance supplies fresh funding while Alibaba continues its previously announced AI and cloud investments, with completion scheduled for Aug. 26 under the agreed terms.