MUMBAI: Alibaba is putting its money where its AI ambitions are. The Chinese technology giant is planning to raise about HK$80 billion, or roughly $10 billion, through a Hong Kong share placement as it ramps up spending on artificial intelligence and computing infrastructure.
The company is offering 710 million shares at HK$112.70 apiece, a 3.6 per cent discount to its closing price on Friday. China International Capital Corp. and UBS Group AG are arranging the transaction, according to the deal terms.
Alibaba plans to use the proceeds to strengthen its full-stack AI capabilities, including expanding and upgrading the infrastructure required to support its growing AI operations. The company will be subject to a 90-day lock-up following the placement.
The fundraising comes at a costly point in Alibaba’s AI push. Its profit for the June quarter fell by more than 75 per cent to 10.5 billion yuan, or around $1.6 billion, while the company recorded a $6.6 billion free-cash outflow as spending on AI projects and computing infrastructure increased.
The company has increasingly redirected capital towards AI and cloud computing as competition intensifies. Its Qwen family of AI models has emerged as a major part of that strategy, alongside investments in chips, data centres and large language model development.
The latest share sale therefore gives Alibaba another sizeable pool of capital to accelerate its AI ambitions at a time when those ambitions are already weighing heavily on its finances.
With HK$80 billion on the table, Alibaba is betting that spending big on AI today will help build a stronger technology business tomorrow.
