Alibaba on Sunday launched a HK$80 billion ($10.2 billion) share placement to fund artificial intelligence development, marking the largest primary follow-on offering ever by a Hong Kong-listed company.
The Chinese e-commerce and cloud computing giant plans to sell 710 million new shares at HK$112.70 each, a 3.6% discount to its last closing price. All net proceeds will go toward what Alibaba calls its “full-stack” AI capabilities, covering chips, computing infrastructure and the development and deployment of AI models.
Shares slumped nearly 10% in Hong Kong trading on Monday as the market digested the dilutive offering. The deal would rank as the world’s third-largest primary follow-on share sale this year, behind offerings from Alphabet and Intel.
Oversubscribed Before Opening
The offering attracted strong demand from sovereign wealth funds and institutional investors, with two sources telling Reuters the deal was oversubscribed, prompting Alibaba to increase its size. Morgan Stanley, HSBC, UBS and CICC are serving as joint bookrunners.
Alibaba’s offering was not registered under U.S. securities laws as an offshore transaction, meaning American investors were not eligible to participate.
AI Capex on Track for 2.5-Year Payback
The placement follows Alibaba’s quarterly results last week, which showed the company had already spent nearly half of its three-year capex investment plan. CEO Eddie Wu told analysts the expected payback on AI-related investments was on track to fall to 2.5 years from 3 years, driven by surging demand for compute capacity.
Net profit for the April-to-June quarter fell 75% from a year earlier as the company ramped up AI-related capital expenditures. “To be able to capture that future growth, we first need to make these capex investments to build out the necessary compute capacity,” Wu said on an earnings call.
The fundraising comes just weeks after Alibaba released its latest AI model, Qwen 3.8-Max, which early benchmarking suggests is strong in agentic and reasoning tasks. The broader global AI infrastructure race continues to intensify, with the four major U.S. hyperscalers expected to spend roughly $725 billion combined on capital expenditures in 2026, much of it tied to AI data centers and chips.
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