Alibaba shares slide after US$10.2 billion AI share sale offered at sharp discount

Alibaba's shares fell sharply in Hong Kong trading on Monday after the e-commerce and cloud computing giant announced a US$10.2 billion share sale at a 8.4 per cent discount to its previous close. The offering, the largest-ever primary follow-on by a Hong Kong-listed company, aims to fund Alibaba's AI ambitions, including the development of chips, AI infrastructure, and models.

Despite strong demand, with US$28 billion in orders, investors have expressed concerns about stock dilution and execution risks, with some analysts suggesting that Alibaba's focus on e-commerce rather than advanced tech could hinder its ability to innovate in AI. The deal follows a week of poor performance for Alibaba, with its quarterly net profit falling 75 per cent due to AI-related spending.

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