- Alibaba raises $10.2 billion to bankroll AI infrastructure push
- Hong Kong’s largest follow-on offerings underscore the intensifying capital race behind AI
Alibaba raised HK$80 billion ($10.2 billion) by placing 710 million newly issued ordinary shares with non-U.S. investors outside the U.S. at HK$112.70 per share on August 24, marking its first new share placement since its 2019 Hong Kong listing.
The deal was reportedly more than fully subscribed within an hour of launch, with strong demand from high-quality long-term investors, including sovereign wealth funds.
Alibaba said 100% of the proceeds will be used to invest in its full-stack AI capabilities, including expanding and upgrading AI infrastructure.
Morgan Stanley, HSBC, UBS and China International Capital Corp. are acting as joint bookrunners.
According to data compiled by Bloomberg, the placement would be Hong Kong’s biggest follow-on offering by a company on record, according to data compiled by Bloomberg.
Raising while investing
The fundraising comes as Alibaba enters an AI investment window defined by accelerating revenue but mounting pressure on profits.
In its latest quarterly results released on August 20, Alibaba reported revenue of 268.95 billion yuan, up 9% year on year, while net income attributable to shareholders plunged 75% to about 10.5 billion yuan.
Alibaba Cloud, however, is accelerating. External commercial revenue grew 45%, its fastest pace in nearly six years. AI-related product revenue reached 12.38 billion yuan, marking the 12th consecutive quarter of triple-digit growth.
Annualized AI-related revenue has surpassed 49.5 billion yuan, with management expecting it to approach $10 billion next quarter.
At the same time, capital expenditure jumped 75% to 67.68 billion yuan, while free cash flow turned negative by about 44.7 billion yuan.
Of the 380 billion yuan three-year AI and cloud investment plan announced in February 2025, Alibaba had spent roughly half by the end of the latest quarter.
CEO Eddie Wu said AI infrastructure investments could be recovered within three years, with the payback period potentially falling to two and a half years or even two years as AI product margins improve.
A bet on China’s AI race
The HK$80 billion placement ranks among the largest follow-on offerings in Hong Kong and globally this year, underscoring the scale of capital now required to compete in AI.
For Alibaba, the timing is strategic. Hong Kong markets are liquid, while global investors are increasingly looking for exposure to China’s leading AI companies.
More broadly, the deal shows that the AI race is becoming as much a test of capital endurance as of technological capability.
Alibaba is effectively locking in long-term funding before the next stage of the global AI boom. With OpenAI, Anthropic and other leading AI companies potentially heading toward public markets, Alibaba’s placement also offers international investors a relatively rare opportunity to take a direct position in China’s AI infrastructure buildout.
The message is clear: Alibaba is willing to dilute shareholders today to buy itself more time—and more computing power—for the AI race ahead.
