Alibaba Raises $10.2 Billion to Expand AI Infrastructure

Alibaba Group plans to raise HK$80 billion ($10.21 billion) through a new share placement as the Chinese technology giant accelerates investment in artificial intelligence and cloud computing.

In a filing on Sunday, Alibaba said it will issue 710 million new shares at HK$112.70 per share. The new stock will account for approximately 3.57% of the company’s enlarged share capital.

Alibaba expects the placement to generate net proceeds of around HK$79.7 billion. The company said all of the funds will be directed toward strengthening its artificial intelligence capabilities and infrastructure as competition intensifies across China’s technology industry.

The fundraising is expected to be completed on Aug. 26, subject to customary closing conditions. Alibaba said the shares will be offered to at least six professional, institutional or other qualified investors located outside the United States.

Alibaba described the capital raise as part of its strategy to extend its global leadership in AI. The company plans to expand and upgrade the infrastructure required to develop and deploy artificial intelligence technologies, reinforcing its broader push into AI and cloud services.

Investors reacted negatively to the announcement. Alibaba’s Hong Kong-listed shares dropped 10.2% to HK$110.40 by 02:21 GMT, pushing the stock below the HK$112.70 placement price. The decline highlighted concerns about shareholder dilution despite the company’s plans to invest the proceeds in rapidly growing technology businesses.

The placement comes as Alibaba increases spending on AI infrastructure and cloud computing, areas that have become critical battlegrounds for major Chinese technology companies. Artificial intelligence investment has accelerated across the sector as companies compete to develop advanced models, cloud platforms and computing capacity.

The newly issued Alibaba shares will carry the same rights as existing shares and rank equally with them after issuance. Alibaba has also agreed to a 90-day lock-up period following completion of the placement.

The HK$80 billion fundraising gives Alibaba substantial additional capital to finance its AI expansion while positioning the company for continued competition in the global artificial intelligence and cloud computing markets.