Alibaba Raises Funds for AI Investment
Alibaba Group (NYSE:BABA) has launched an 80 billion Hong Kong dollar (approximately $10.2 billion) placement of 710 million new shares, priced at 112.70 Hong Kong dollars each. This offering, set to close on Wednesday, is earmarked to fund the company’s full-stack artificial intelligence (AI) capabilities, including enhancements to its AI infrastructure. This marks the world’s third-largest primary follow-on share sale of 2026, following Alphabet’s $84.75 billion program and Intel’s $20 billion issuance.
Last quarter, Alibaba reported a net income drop of 75% to approximately $1.5 billion, with free cash flow declining to negative $6.6 billion amidst rising AI expenditures. The company has committed to investing at least 380 billion yuan (over $50 billion) in cloud and AI infrastructure over three years and has already utilized nearly half of this budget. The placement was heavily oversubscribed, indicating strong investor interest despite a recent drop in share prices, with Hong Kong-listed shares falling 8.4% following the announcement.
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