ALIBABA PLANS $10.2BN SHARE SALE TO FUND AI EXPANSION

Chinese technology giant Alibaba Group has launched a HK$80 billion ($10.2 billion) share placement to raise funds for its artificial intelligence expansion, marking one of the largest follow-on share offerings by a Hong Kong-listed company.

The company plans to issue 710 million new shares, with the proceeds going entirely towards strengthening its “full-stack” AI capabilities, including computing infrastructure, chips and AI model development.

The fundraising comes as Alibaba increases spending on AI and cloud services. Its capital expenditure rose sharply in the latest quarter, contributing to a 75 per cent decline in quarterly net profit, even as revenue increased by 9 per cent.

Alibaba said the increased investment is necessary to meet growing demand for AI and computing services and strengthen its position in the increasingly competitive global AI market.

However, investors have raised concerns about potential share dilution and the scale of Alibaba’s AI spending. The company’s Hong Kong-listed shares fell sharply after the announcement, dropping by more than 8 per cent during trading.

The share sale highlights the growing cost of competing in the global AI race, as major technology companies continue to invest heavily in chips, data centres, computing capacity and advanced AI models.