HONG KONG / RankWire.AI / – Alibaba Group has set the price for an HK$80 billion share offering aimed at funding its 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 anticipates the transaction will finalize by August 26, pending usual closing conditions.
Alibaba stated that all net proceeds from the offering will be allocated to advancing its comprehensive AI capabilities. This includes expanding and upgrading various aspects of its AI infrastructure. The firm has developed a broad AI ecosystem that includes cloud services, models, chips, and applications. Notable components of this platform are the Qwen model series and Alibaba Cloud offerings.
The share placement targets international investors outside the U.S. through offshore transactions. The HK$112.70 offering price is 8.4% lower than Alibaba’s HK$123 closing price on Friday. In early Monday trading, Hong Kong-listed shares dropped 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 expands amid recent funding
This fundraising follows a significant rise in Alibaba’s capital expenditure on computing infrastructure. During the quarter ending June 30, the company spent RMB67.68 billion, approximately US$10 billion, which is a 75% jump from RMB38.68 billion a year earlier. Alibaba attributes this surge to ongoing investments in AI infrastructure, increased demand for computing power, and rising chip component prices.
For the quarter, Alibaba reported revenue of RMB268.95 billion, around US$39.6 billion, marking a 9% year-over-year increase. Its AI Cloud and Compute Services generated RMB48.44 billion, roughly US$7.1 billion, representing a 45% growth from the previous year. Revenue from AI-related products hit RMB12.38 billion, continuing a 12-quarter streak of triple-digit annual growth.
Share issuance reinforces Alibaba’s AI expansion strategy
This new capital raise complements Alibaba’s earlier investment initiative announced in February 2025, which pledged at least RMB380 billion toward AI and cloud infrastructure over three years. This commitment exceeds the total spending on these sectors over the previous decade. Since then, Alibaba has kept expanding its computing capacity, developing its cloud platform, AI models, and internally crafted semiconductor technology.
The increased investment has been accompanied by declining quarterly profits but accelerated growth in cloud revenue. For the June quarter, Alibaba reported a net income of RMB10.44 billion, a 75% decrease from the same period last year. Its free cash flow showed a net outflow of RMB44.67 billion, mainly due to higher cloud infrastructure expenditures. The HK$80 billion placement provides Alibaba with additional funds specifically allocated for its comprehensive AI capabilities and infrastructure expansion.