Alibaba Group’s shares fell 8% in early Hong Kong trading on Monday after the company completed a HK$80 billion ($10.21 billion) share placement, the largest-ever primary follow-on offering by a Hong Kong-listed company.
The 710 million new shares were priced at HK$112.70 each, an 8.4% discount to the prior close. The placement ranks as the third-largest globally this year, trailing offerings by Alphabet and Intel.
Proceeds from the deal will support artificial intelligence-related development, including the expansion of Alibaba’s AI infrastructure. The company noted in its latest quarterly earnings that it had already deployed nearly half of its three-year capital expenditure plan, driven by surging demand for AI services.
Alibaba also revised its projected payback period for AI investments to 2.5 years, down from three years, reflecting accelerated returns. Quarterly net profit declined 75% year-over-year, primarily due to elevated AI-related spending.
The share sale follows Alibaba Cloud’s expansion of its global AI infrastructure, including the launch of a third data center in South Korea. This brings Alibaba Cloud’s total network to 104 availability zones across 30 regions. The expansion aligns with a $56.54 billion, three-year pledge announced in October to bolster AI infrastructure.
Alibaba’s shares have faced pressure amid heavy investment in AI capabilities and broader market volatility in Chinese tech equities.
