Alibaba Group Holding, on Snday (23 August), reportedly launched a ₹95,000 crore (US$10.2 billion) new share issue in Hong Kong, with the entire proceeds earmarked for expanding its artificial intelligence capabilities. It would rank as the world’s third-largest primary follow-on share sale this year after offerings from Alphabet and Intel.
The said on Sunday (23 August) that it would issue shares worth HK$80 billion ( ₹95,000 crore; US$10.2 billion) as it seeks to strengthen its position in the global AI race.
Alibaba Group said the funds would be used to “extend the company’s global AI leadership” and “invest in its full-stack AI capabilities”, including expanding and enhancing AI infrastructure.
Alibaba AI investment gains strong investor interest
The placement would be Hong Kong’s biggest follow-on offering by a company on record, according to data compiled by Bloomberg. It would also be the city’s biggest share sale since 2021, when technology-investment firm Prosus NV sold $14.7 billion in shares of China’s Tencent Holdings Ltd., according to data compiled by Bloomberg.
Strong investor interest prompted Alibaba to increase the offering to HK$80 billion, the South China Morning Post reported citing officials in the know.
The deal would be Alibaba’s first new share placement since its Hong Kong listing in 2019.
apiece, representing a 3.6 per cent discount to its latest closing price, according to a term sheet reviewed by Reuters.
Alibaba ramps up AI spending
The fundraising comes as Alibaba accelerates investment in AI computing, cloud services, chips and large language models.
Its cloud and AI business recorded a 45 per cent year-on-year increase in revenue in the April-June quarter, while capital expenditure surged 75 per cent to ₹80,000 crore (US$10 billion).
Alibaba chief executive Eddie Wu Yongming said the company expects its investment in AI computing to break even within three years, with the payback period potentially falling to about two years as gross margins improve.
Alibaba had spent ₹2.25 lakh crore (190 billion yuan) in capital expenditure by the end of June. In February 2025, it committed ₹4.5 lakh crore (380 billion yuan; US$56.4 billion) over three years towards AI infrastructure.
Qwen and AI chips add to Alibaba’s AI ambitions
Alibaba’s AI push extends beyond cloud infrastructure. Its Qwen family of large language models has recorded more than 3 billion downloads globally, while its T-Head semiconductor unit is expanding its AI chip business.
Alibaba’s Zhenwu chips have served more than 650 customers on Alibaba Cloud. Its Zhenwu M890 AI processor also entered commercial-scale deployment earlier this month.
The company’s AI Cloud and Compute Services segment generated ₹57,000 crore (48.4 billion yuan) in revenue for the quarter ended June 30, marking its fastest growth in 22 quarters.
“We expect supply to continue ramping up in the second half of the year to meet strong customer demand,” Wu said.
Alibaba faces scrutiny over rising AI costs
The massive fundraising comes after Alibaba’s quarterly net profit plunged 75 per cent year on year as AI-related spending increased. Its revenue, however, rose 9 per cent to nearly ₹2.24 lakh crore (269 billion yuan).
Alibaba’s New York-listed shares fell 8.57 per cent on Friday, while its Hong Kong-listed shares declined 2.54 per cent.
Alibaba Group is now joining a global race for AI capital. Tencent Holdings’ AI capital expenditure rose 176 per cent year on year to ₹62,000 crore (52.8 billion yuan) in the June quarter.
US technology companies are spending on a far larger scale. are collectively expected to spend about ₹62 lakh crore (US$700 billion) on capital expenditure this year.