Alibaba Dilutes Shares To Feed Its AI Spending Spree

Alibaba, China's Amazon, is increasing its share count to fund its AI expansion. The company announced a $10.2 billion capital raise, selling 710 million shares at HK$112.70 each. Alibaba had already committed $53 billion to $56 billion to AI and cloud infrastructure over the next three years. In 2025 alone, the company spent approximately $18 billion on AI.

Projections estimate AI capex could reach $1.6 trillion by 2031, surpassing oil and gas. Alibaba's AI model Qwen scored 58 on Artificial Analysis's Intelligence Index, ranking behind models like Claude's Opus 5 and Fable 5. The company's high operating costs, particularly compute expenses, led to a 75% profit drop in the June quarter.

Alibaba's cloud computing market share in China is estimated at 38%-40%, with projections of it reaching about 50% by 2031.