Alibaba Group is seeking roughly HK$80 billion ($10.2 billion) from a Hong Kong share placement, giving the Chinese technology giant fresh capital to accelerate one of the industry’s most expensive artificial intelligence expansion programs.
The company plans to issue 710 million ordinary shares at HK$112.70 each, a 3.6% discount to the previous closing price. Alibaba said all net proceeds will be invested in its full-stack AI capabilities, including computing infrastructure, chips and the development and deployment of artificial intelligence models. The company’s share placement is expected to become the largest primary follow-on offering by a Hong Kong-listed company.
AI investment is putting pressure on Alibaba’s finances
The capital raise follows a sharp acceleration in spending. Alibaba’s June-quarter capital expenditure climbed about 75% to 67.68 billion yuan, or close to $10 billion, as the company expanded data-center capacity and absorbed higher chip procurement costs. Net profit fell roughly 75% year over year to 10.5 billion yuan.
That pressure comes despite strong demand in the company’s fastest-growing technology businesses. AI Cloud and Compute Services revenue rose 45% to about $7.1 billion, while AI-related product revenue recorded another quarter of triple-digit growth. Alibaba has already deployed roughly half of the 380 billion yuan it previously committed to cloud and AI infrastructure through 2029.
Alibaba joins an increasingly capital-intensive AI race
Alibaba’s financing strategy reflects a wider shift across global technology markets: AI leadership increasingly depends not only on software models but also on access to chips, electricity, data centers and financing.
That pressure is also visible among US technology companies. Nvidia enters its next earnings report with investors scrutinizing the financing required to sustain the broader AI infrastructure buildout, while former Bitcoin miners are increasingly converting data-center capacity toward AI computing.
For investors seeking broader sector exposure, major semiconductor and cloud companies remain central to the current group of AI stocks, with demand increasingly driven by the same infrastructure bottlenecks Alibaba is spending heavily to address.
Strong demand reportedly pushed Alibaba to enlarge the offering, with sovereign wealth funds among interested investors. Morgan Stanley, HSBC, UBS and CICC are acting as bookrunners.
The financing gives Alibaba additional room to compete, but it also raises the stakes. Investors will now be watching whether faster cloud and AI revenue growth can ultimately justify the company’s rapidly expanding capital requirements.
