Alibaba Plans $10bn Hong Kong Share Sale to Fund AI Expansion

Chinese technology giant Alibaba Group is planning to raise about HK$80 billion ($10.2 billion) through a new share placement in Hong Kong as it steps up investment in artificial intelligence and computing infrastructure.

The proposed fundraising, announced on Sunday, would involve the sale of 710 million ordinary shares at HK$112.70 each, according to a term sheet reviewed by Reuters. The price represents a discount of about 3.6% to Alibaba’s latest closing share price.

Alibaba said it intends to use 100% of the net proceeds from the transaction to strengthen its “full-stack” AI capabilities. That includes expanding AI infrastructure, developing computing capacity, proprietary chips and artificial intelligence models and applications.

The proposed transaction would be a major deal for Hong Kong’s stock market. Alibaba said it would represent the largest-ever primary follow-on offering by a Hong Kong-listed company and the world’s third-largest primary follow-on share sale of 2026, behind offerings by Alphabet and Intel.

The move comes only days after Alibaba reported a sharp decline in quarterly profit as its AI investment programme accelerated.

For the April-to-June quarter, Alibaba’s net profit fell by 75% to 10.5 billion yuan ($1.6 billion) from 43.1 billion yuan a year earlier. At the same time, revenue increased 9% to almost 269 billion yuan.

Capital expenditure jumped 75% to 67.7 billion yuan, largely reflecting increased spending on AI infrastructure, computing capacity and chips.

Despite the pressure on profits, Alibaba’s AI-related businesses are showing strong growth.

Revenue from its AI cloud and computing services rose 45% year-on-year to 48.4 billion yuan ($7.1 billion) during the quarter. Alibaba said AI-related product revenue had recorded its 12th consecutive quarter of triple-digit growth.

The company has committed 380 billion yuan ($56 billion) to cloud computing and AI infrastructure over three years through 2029. Alibaba said it had already spent about half of that planned investment.

Chief Executive Officer Eddie Wu has argued that the heavy spending is designed to position Alibaba for long-term growth as businesses increasingly adopt AI agents, cloud computing and generative AI services.

Alibaba is pursuing what it describes as a full-stack AI strategy, spanning chips, cloud infrastructure, foundation models and applications. Its Qwen family of AI models is a central part of that strategy.

The company has also said it expects AI and cloud revenue growth to accelerate as it expands its computing capacity and improves the efficiency of its AI operations.

The fundraising highlights the enormous financial demands facing technology companies competing in the global AI race. Alibaba is effectively asking investors for fresh capital at a time when it is already committing tens of billions of dollars to infrastructure, chips and model development.

The proposed share placement therefore represents both a significant financing move and a major statement of intent from Alibaba: the company is prepared to continue spending heavily in the race to establish itself as one of China’s leading AI platforms.

The proposed transaction remains subject to the applicable closing conditions and regulatory requirements.