HONG KONG / RankWire.AI / – Alibaba Group has announced the pricing of a HK$80 billion share placement as it boosts spending on artificial intelligence and cloud infrastructure development. The Chinese tech giant will issue 710 million new ordinary shares at HK$112.70 each. Based on current exchange rates, the total value of the offering is approximately US$10.2 billion. The company expects the deal to close on Aug. 26, subject to standard closing conditions. The raised funds are earmarked for investments in its AI operations.
Alibaba has stated that all net proceeds from the offering will be dedicated to expanding its full-stack artificial intelligence capabilities. This includes investments in enhancing and scaling computing infrastructure that underpins AI products and cloud services. As demand for computing power increases, Alibaba Cloud has become a core element of the company’s technological activities. The firm has also increased its expenditure on models, data processing, and related infrastructure components. These investments have grown in tandem with rising revenue from AI-related products and services.
The placement targets non-U.S. investors outside the United States through offshore transactions. The issue price of HK$112.70 reflects an 8.4% discount compared to Alibaba’s HK$123 closing price on Friday. During early Monday trading, Alibaba’s Hong Kong-listed shares fell sharply, dropping as much as 10% to HK$110.10. The company also maintains a listing in New York via American depositary shares under the ticker BABA. The issuance of these new shares will increase the company’s equity base after the transaction is completed.
Rising AI investment driven by cloud service expansion
Alibaba has already ramped up capital expenditures as it scales up computing capacity for artificial intelligence. During the quarter ending June 30, capital spending reached RMB67.68 billion, approximately US$10 billion. This figure represents a 75% increase from RMB38.68 billion reported during the same period last year. The surge in spending has been attributed to ongoing investments in AI infrastructure, heightened demand for computing resources, and rising chip component costs. This quarter also marked another period of rapid growth for Alibaba’s cloud services.
Alibaba’s quarterly revenue reached RMB268.95 billion, or roughly US$39.6 billion, reflecting a 9% increase year-over-year. Revenue from AI Cloud and Compute Services alone hit RMB48.44 billion, about US$7.1 billion, growing 45% annually during the quarter. Revenue from AI-related products hit RMB12.38 billion, achieving triple-digit year-on-year growth for the 12th consecutive quarter. These figures highlight the substantial scale of Alibaba’s AI and cloud activities already in operation.
The capital raise supports a three-year AI and cloud investment plan
The HK$80 billion share placement follows an investment commitment that Alibaba announced in February 2025. The company indicated it would allocate at least RMB380 billion over three years to artificial intelligence and cloud infrastructure projects. This planned expenditure exceeds the combined investments in these sectors during the previous decade. The proceeds from the current share sale will further bolster Alibaba’s ongoing full-stack AI development, with funds directed toward an already established investment program prior to this offering.
While increasing capital expenditure, Alibaba has also reported a decline in quarterly profit and significant cash outflows. For the June quarter, net income was RMB10.44 billion, down 75% from the same period last year. The company’s free cash flow showed a net outflow of RMB44.67 billion, primarily due to intensified investments in cloud infrastructure. The new equity issuance provides fresh capital while Alibaba continues to pursue its previously announced AI and cloud investment strategies. The closing is scheduled for Aug. 26 under the established terms.