Alibaba has launched a HK$80 billion, or approximately $10.2 billion, share placement to fund the expansion of its artificial intelligence capabilities. The Chinese technology giant plans to use the proceeds for its full-stack AI strategy, covering computing infrastructure, chips, large language models and AI applications. The share sale represents one of the largest follow-on offerings by a Hong Kong-listed company.
The move comes as Alibaba significantly increases spending on artificial intelligence and cloud infrastructure. During the April-to-June quarter, the company’s capital expenditure climbed 75% to around $10 billion, while revenue from its AI Cloud and Compute Services increased 45% year-on-year. AI-related product revenue has also maintained triple-digit growth for multiple consecutive quarters, highlighting the growing contribution of AI to Alibaba’s technology business.
Alibaba’s strategy extends beyond developing individual AI applications, with the company seeking greater control over the technology stack supporting its AI operations. This includes investment in chips, data centres, cloud computing, large language models and applications, placing the company in competition with major global technology firms investing heavily in AI infrastructure and services.
The funding decision comes with a trade-off for existing shareholders because the issuance of 710 million new shares will dilute their ownership. Alibaba priced the offering at HK$112.70 per share, while its Hong Kong-listed stock fell sharply following the announcement as investors questioned whether the scale of AI spending would generate sufficient returns.
Alibaba’s latest move reflects the accelerating global competition around artificial intelligence, as major technology companies continue committing billions of dollars toward computing capacity, chips and AI models. With Alibaba directing the entire share-sale proceeds toward its AI ambitions, the company is positioning artificial intelligence and cloud computing as increasingly important pillars of its future growth.
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