Alibaba Plans $10.2 Billion Share Sale to Fund AI Buildout

Alibaba is planning to raise HK$80 billion ($10.2 billion) by selling 710 million new shares in Hong Kong. [2][3] The sale is priced at HK$112.70 per share, which represents a 3.6% discount to the stock's previous closing price. [2][3] Following this share sale, Alibaba will be subject to a 90-day lockup period. [3]

The company has stated that all net proceeds from this sale will go toward funding a “full stack” AI push. [2] This expansion of AI infrastructure and capabilities will include investments in chips, data centers, and AI models. [2][3]

Alibaba’s move to issue equity for AI expansion highlights the immense capital requirements of building modern AI infrastructure. The company noted that its payback on AI investments has improved from 3 years to 2.5 years, yet its April-to-June net profit fell 75% year-on-year. [2] This suggests that while AI demand is rising, the near-term costs are heavily impacting earnings. By choosing a share sale over debt, Alibaba avoids fixed interest payments but faces investor pressure due to stock dilution, meaning the AI investments must increase future profit per share. [2] What the sources don't address: How Alibaba's AI infrastructure buildout compares to the spending of its domestic cloud rivals like Tencent or Baidu.