Alibaba Group plans to raise up to 80 billion Hong Kong dollars (about $8.73 billion) through a share sale in Hong Kong, marking the largest capital increase by an already listed company in the city and the third-largest globally in 2024.
The offering consists of 710 million new ordinary shares priced at HK$112.70 each, a 3.6% discount to the last close. The proceeds will be fully allocated to artificial intelligence initiatives, including infrastructure expansion, chip development and AI model deployment, the company said in a statement.
Investor demand was strong, with the placement reportedly oversubscribed, prompting Alibaba to increase the deal size. Joint global coordinators include Morgan Stanley, HSBC, UBS and CICC, according to two people familiar with the matter. U.S. investors are excluded as the offering was not registered under U.S. securities laws.
The capital raise follows Alibaba’s first-quarter results, which showed a 75% year-on-year decline in net profit to 1.9 billion yuan, attributed to elevated AI investments. The company has already deployed nearly half of its three-year investment plan, though management expects a shorter payback period of 2.5 years—down from three—due to surging AI demand.
“To capture future growth, we must first invest in the necessary computing capacity,” Alibaba CEO Eddie Wu said during an earnings call. The global AI boom has driven infrastructure spending, particularly in the U.S. and China, with Microsoft, Amazon, Alphabet and Meta projected to invest $725 billion cumulatively by 2026, primarily in AI data centers, semiconductors and cloud platforms.
