Alibaba launches $10B Hong Kong share placement to fund AI spending | Latest Tech News
China’s Alibaba on Sunday launched a HK$80-billion ($10.2 billion) share placement to fund artificial intelligence-related development.
A deal by the Chinese e-commerce and cloud computing giant would mark the largest-ever main follow-on offering by a Hong Kong-listed company.
It would rank as the world’s third-largest main follow-on share sale this yr after choices from Alphabet and Intel.
Alibaba has said it intends to use 100% of the online proceeds from the placement to invest in its “full stack” AI capabilities. SOPA Images/LightRocket via Getty Images
The company said it intends to use 100% of the online proceeds from the placement to invest in its “full stack” AI capabilities, a class that contains chips, infrastructure and the development and deployment of AI fashions.
A time period sheet reviewed by GWN confirmed Alibaba deliberate to promote 710 million extraordinary shares at HK$112.70 a share. That represented a 3.6% low cost to its most current closing price.
In its announcement for the $10.2 billion share placement, Alibaba didn’t disclose extra particulars on its investment plans by class of its deliberate AI-related investment.
It didn’t remark past its regulatory disclosure.
Last week, Alibaba reported its outcomes for the April-to-June quarter, saying it had already spent practically half of its three-year capex investment plan. It said its anticipated payback on AI-related investments was on observe to fall to 2.5 years from three years, pushed by surging demand.
Alibaba’s internet revenue for the quarter fell 75% from a yr earlier as it ramped up its AI-related capital expenditures.
“In order to be able to capture that future growth, we first need to make these capex investments to build out the necessary compute capacity,” CEO Eddie Wu said on an earnings call.
Alibaba’s HK$80-billion share placement would mark the largest-ever main follow-on offering by a Hong Kong-listed company. Bloomberg via Getty Images
The company’s share offering has been met with strong demand from traders, including sovereign wealth funds, two people acquainted with the deal told GWN. They couldn’t be named because the knowledge was not public.
Alibaba elevated the scale of the offering after the deal was oversubscribed, the people acquainted with the matter said.
Morgan Stanley, HSBC, UBS and CICC are serving as joint bookrunners of the Alibaba offering, said one of the sources and a third particular person with data of the matter. The banks didn’t immediately reply to a GWN request for remark.
The share placement was not registered under US securities legal guidelines as an offshore transaction, that means American traders weren’t eligible to take part, Alibaba said.
Since 2022, the global AI growth has fueled staggering capital outlays on infrastructure and data facilities, including in the U.S. and China.
The 4 major U.S. hyperscalers – Microsoft, Amazon, Alphabet and Meta – together are anticipated to spend roughly $725 billion in capital expenditures in 2026, a lot of it tied to AI data facilities, chips and cloud infrastructure.
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