Alibaba raises $10.2 billion in Hong Kong share placement to fund AI expansion

Alibaba Group Holding raised HK$80 billion ($10.2 billion) in a record-breaking Hong Kong share placement to fund its full-stack AI expansion, marking the city's largest-ever primary follow-on offering. The capital push comes days after Alibaba reported a 75% drop in quarterly profit due to soaring AI capital expenditures. While the offering attracted strong institutional demand, Alibaba's stock plunged up to 10% on Monday, prompting supportive share purchases from Chairman Joseph Tsai and CEO Eddie Wu.

Hong Kong share placement details

• ▪The share placement is the largest-ever primary follow-on offering by a Hong Kong-listed company and the third-largest globally in 2026.
• ▪Alibaba Group Holding launched a HK$80 billion ($10.2 billion) share placement of 710 million newly issued ordinary shares in Hong Kong to non-U.S. investors.
• ▪Alibaba Group Holding priced the share placement at HK$112.70 per share, representing a 3.6% discount to its most recent closing price.
• ▪Morgan Stanley, HSBC, UBS, and China International Capital Corporation served as joint bookrunners for the Alibaba Group Holding share placement.
• ▪Alibaba Group Holding increased the size of the offering to HK$80 billion after the deal was oversubscribed by nearly three times, drawing strong demand from sovereign wealth funds and long-only institutional investors.

AI infrastructure investment plans

• ▪Alibaba Group Holding reported a 75% drop in net profit for the June quarter as capital expenditure rose 75% to 67.7 billion yuan ($10 billion) due to heavy AI spending.
• ▪Alibaba Group Holding committed 380 billion yuan ($56.5 billion) over three years starting in early 2025 toward cloud computing and AI infrastructure, and has already spent nearly half of it.
• ▪Alibaba Group Holding plans to use 100% of the net proceeds from the placement to invest in its full-stack AI capabilities, including chips, infrastructure, and the development and deployment of AI models.
• ▪Alibaba Group Holding CEO Eddie Wu stated that the company expects its investments in AI computing to break even within three years, with the payback period potentially falling to 2 to 2.5 years.

Stock price decline

• ▪Alibaba Group Holding's U.S.-listed shares fell 3.4% in premarket trading on Monday, August 24, 2026, following a previous 8.57% decline on Friday, August 21, 2026.
• ▪The Hang Seng Tech Index fell as much as 4% on Monday, August 24, 2026, driven by supply concerns over the fundraising plans of Alibaba Group Holding and Yangtze Memory Technologies Co.
• ▪Alibaba Group Holding's Hong Kong-listed shares fell as much as 10% on Monday, August 24, 2026, closing down 8.4% to 8.5% at HK$112.70 following the share placement announcement.

Chinese tech AI competition

• ▪Tencent Holdings' capital expenditure rose 65% quarter-on-quarter to 52.8 billion yuan in the June quarter as it continued to invest in computing infrastructure to monetize its AI models.
• ▪Alibaba Group Holding's domestic rival Baidu Inc stated it has no plans for a new share issuance because its existing funds and operating cash flow are sufficient.
• ▪The four major U.S. hyperscalers—Microsoft, Amazon, Alphabet, and Meta—are collectively expected to spend approximately $700 billion to $725 billion in capital expenditures in 2026.