Alibaba raises $10.2bn in record Hong Kong share placement to fund AI infrastructure

Alibaba is raising $10.2bn and spending all of it on AI

The Hong Kong placement is the largest primary follow-on by a locally listed company, and it is roughly half of what the EU has committed to its entire AI gigafactory programme Alibaba is placing HK$80bn, about $10.2bn, of new shares in Hong Kong and says all net proceeds will go to AI infrastructure and capabilities. It comes days after the company reported a 75% fall in quarterly net profit driven by that same spending. Alibaba is going to the market for money to spend on AI, and it is not being coy about the proportion. The company is placing HK$80bn of new shares in Hong Kong, around $10.2bn, and says 100% of net proceeds will fund its full stack AI capabilities including infrastructure. The size is a record on two counts. Alibaba calls it the largest primary follow-on offering ever by a Hong Kong-listed company, and the biggest Regulation S equity offering on record, meaning shares sold to investors outside the United States. Globally it lands third this year. Only Alphabet, which raised $85bn in equity, and Intel have run larger primary follow-ons in 2026. The timing is what makes it interesting. Three days earlier Alibaba reported that quarterly net profit had fallen 75%, with capital expenditure up 75% to 67.68bn yuan in the April to June quarter. The spending is buying growth somewhere. Cloud and AI revenue rose 45% to 48.44bn yuan, and the company says its AI model services now run above 16bn yuan in annual recurring revenue. Chief executive Eddie Wu has been direct about the sequence. "In order to be able to capture that future growth, we first need to make these capex investments to build out the necessary compute capacity," he said. This tops up a commitment already half spent. Alibaba pledged 380bn yuan over three years in early 2025, reports suggest it is considering raising that to 480bn yuan, and Wu says its own chips could lift margins substantially as they scale. Set that against Europe's headline number. The EU has committed around €20bn to its AI gigafactory programme, so a single afternoon's placement in Hong Kong is roughly half the continent's flagship compute budget. Alibaba is not a distant competitor in this. It opened two availability zones in Paris in June, its third European hub after Germany and Britain, positioning itself as a sovereign option for European customers. Brussels is building rules that point the other way. The Cloud and AI Development Act proposed in June sets a four-tier sovereignty framework whose stricter levels require EU ownership and operational independence, which a Chinese-headquartered provider cannot easily satisfy. So the two trends run straight at each other. Europe wants more compute and is writing rules about whose it can be, while the company raising the money is expanding here regardless.

Alibaba proposes $10 billion share placement to fund global AI drive

The Hangzhou-based firm has been ploughing tens of billions of dollars into AI, with its shareholders eager to see how it will monetise the huge investments. The company intends to use all of the net proceeds to invest in its "full stack AI capabilities, including to expand and enhance its AI infrastructure", it said. Chinese tech giant Alibaba said on Sunday that it plans to issue HK$80 billion ($10.2 billion) in new shares in Hong Kong to fund its global artificial intelligence ambitions. The Hangzhou-based firm has been ploughing tens of billions of dollars into AI, with its shareholders eager to see how it will monetise the huge investments. "The Equity Placement is being undertaken to extend the Company's global AI leadership," Alibaba said in a statement. The company intends to use all of the net proceeds to invest in its "full stack AI capabilities, including to expand and enhance its AI infrastructure", it said. Alibaba on Thursday announced nearly 269 billion yuan ($40 billion) in revenue in its most recent quarter -- a nine percent year-on-year increase -- boosted by the global artificial intelligence frenzy driving demand for its products. The firm is known for its open-source "Qwen" AI models, which have gained popularity with developers worldwide.

Alibaba launches $10B Hong Kong share placement to fund AI spending

China's Alibaba on Sunday launched a HK$80-billion ($10.2 billion) share placement to fund artificial intelligence-related development. A deal by the Chinese e-commerce and cloud computing giant would mark the largest-ever primary follow-on offering by a Hong Kong-listed company. It would rank as the world's third-largest primary follow-on share sale this year after offerings from Alphabet and Intel. The company said it intends to use 100% of the net proceeds from the placement to invest in its "full stack" AI capabilities, a category that includes chips, infrastructure and the development and deployment of AI models. A term sheet reviewed by Reuters showed Alibaba planned to sell 710 million ordinary shares at HK$112.70 a share. That represented a 3.6% discount to its most recent closing price. In its announcement for the $10.2 billion share placement, Alibaba did not disclose additional details on its investment plans by category of its planned AI-related investment. It did not comment beyond its regulatory disclosure. Last week, Alibaba reported its results for the April-to-June quarter, saying it had already spent nearly half of its three-year capex investment plan. It said its expected payback on AI-related investments was on track to fall to 2.5 years from three years, driven by surging demand. Alibaba's net profit for the quarter fell 75% from a year earlier as it ramped up its AI-related capital expenditures. "In order to be able to capture that future growth, we first need to make these capex investments to build out the necessary compute capacity," CEO Eddie Wu said on an earnings call. The company's share offering has been met with strong demand from investors, including sovereign wealth funds, two people familiar with the deal told Reuters. They could not be named because the information was not public. Alibaba increased the size of the offering after the deal was oversubscribed, the people familiar with the matter said. Morgan Stanley, HSBC, UBS and CICC are serving as joint bookrunners of the Alibaba offering, said one of the sources and a third person with knowledge of the matter. The banks did not immediately respond to a Reuters request for comment. The share placement was not registered under US securities laws as an offshore transaction, meaning American investors were not eligible to participate, Alibaba said. Since 2022, the global AI boom has fueled staggering capital outlays on infrastructure and data centers, including in the U.S. and China. The four major U.S. hyperscalers - Microsoft, Amazon, Alphabet and Meta - together are expected to spend roughly $725 billion in capital expenditures in 2026, much of it tied to AI data centers, chips and cloud infrastructure.

Alibaba plans record $10.2 billion Hong Kong share sale to fund AI By Investing.com

Investing.com -- Alibaba Group Holding Ltd. (NYSE:BABA) plans to raise HK80 billion ($10.2 billion) through a Hong Kong share placement to finance artificial intelligence development, Reuters reported Sunday. The transaction would be the largest primary follow-on offering ever undertaken by a Hong Kong-listed company. It would also rank as the world's third-largest primary follow-on share sale this year, behind offerings from Alphabet Inc. (NASDAQ:GOOGL) and Intel Corp. (NASDAQ:INTC). Alibaba plans to sell 710 million ordinary shares at HK$112.70 each, according to a term sheet reviewed by Reuters. The price represents a 3.6% discount to the stock's latest closing level. The Chinese e-commerce and cloud computing group said it would allocate all net proceeds to its "full stack" AI capabilities, including semiconductors, computing infrastructure and the development and deployment of artificial intelligence models. Alibaba did not provide a breakdown of planned spending across those categories. Investor demand for the placement has been strong, including interest from sovereign wealth funds, Reuters reported, citing people familiar with the transaction. The company increased the offering's size after it became oversubscribed, the sources said. Morgan Stanley (NYSE:MS), HSBC Holdings PLC (NYSE:HSBC), UBS Group AG (NYSE:UBS) and China International Capital Corp. are acting as joint bookrunners. The placement was structured as an offshore transaction and was not registered under U.S. securities law, leaving American investors unable to participate. Alibaba said last week that it had already spent nearly half of its three-year capital expenditure programme. The expected payback period for AI investments is on track to decline to 2.5 years from three years, supported by rising demand. Chief Executive Eddie Wu said Alibaba needed to build sufficient computing capacity before it could capture future growth. The heavy investment has weighed on near-term earnings. Alibaba's net profit fell 75% from a year earlier during the April-to-June quarter as AI-related capital spending increased. The fundraising places Alibaba among global technology companies committing large sums to chips, data centres and cloud infrastructure as competition in AI intensifies.