Alibaba raises US$10bil for AI in record Hong Kong share sale
The online retail giant-turned-AI player plans to use the proceeds to invest in full-stack AI capabilities, including expanding and enhancing its infrastructure.
Alibaba Group Holding Ltd has completed the largest secondary share sale in Hong Kong history, raising HK$80 billion (US$10.2 billion) for artificial intelligence (AI) development. The company sold 710 million shares at HK$112.7 each, which was 3.6% below the closing price of its American depositary receipts and 8.4% lower than the Hong Kong close.
This move underscores Alibaba's commitment to amass and spend vast sums to lead in global AI, making it one of the biggest spenders on AI among Chinese rivals. The capital-raising also eclipses the previous record for a follow-on offering by a company in Hong Kong and the city's biggest share sale since 2021. Alibaba has pledged to spend over ¥380 billion over three years on chips, data centers, and large-language model development, with its flagship Qwen offering now the world's most popular model family.
However, this concentrated effort to challenge AI giants like Anthropic PBC and OpenAI may be eroding margins, while domestic consumption is slowing down its mainstay online retail business. The share issuance has already drawn criticism from investor Michael Burry, who expressed concerns about Alibaba's return on invested capital (ROIC) continuing to fall.
The deal will be subject to a 90-day lockup period, and will be arranged by China International Capital Corp, HSBC Holdings Plc, Morgan Stanley, and UBS Group AG.
Written by urgent.news from Free Malaysia Today's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
