Alibaba Group plans to raise up to HK$80 billion ($10.2 billion) in Hong Kong’s largest primary follow-on share sale on record, proceeds of which will be directed toward its artificial intelligence initiatives.
The offering, priced at HK$112.70 per ordinary share, represents a 3.6% discount to the company’s latest closing price. A total of 710 million shares will be sold in a transaction structured as an offshore deal, excluding participation from U.S. investors due to regulatory constraints. The capital raise ranks as the third-largest primary follow-on offering globally this year, trailing only deals by Alphabet and Intel.
All net proceeds will fund Alibaba’s AI strategy, including investments in semiconductors, computing infrastructure and the development and deployment of AI models. The company did not disclose a detailed allocation breakdown across these areas. Alibaba noted that nearly half of its three-year capital expenditure program has already been deployed, with the expected payback period for AI investments projected to shorten from three years to 2.5 years amid rising demand.
The transaction follows a 75% year-over-year decline in Alibaba’s net profit during the April-to-June quarter, attributed to elevated AI-related capital spending. Demand for the shares has been robust, with sovereign wealth funds among the participants, prompting the company to increase the offering size after it became oversubscribed. Joint global coordinators include Morgan Stanley, HSBC and UBS, alongside China International Capital Corp.
Alibaba Chief Executive Eddie Wu emphasized the need to expand computing capacity to capture future growth, framing the capital raise as essential for long-term competitiveness in the AI sector.
