Alibaba Raises $10.2 Billion in Record Hong Kong Share Sale to Fund Full-Stack AI Push

Alibaba Group Holding Ltd. is raising approximately HK$80 billion ($10.2 billion) through a Hong Kong share placement, marking the largest-ever primary follow-on offering by a company listed on the Hong Kong Stock Exchange and the city's biggest share sale since 2021. The company said it intends to direct 100 percent of net proceeds into its “full-stack” AI capabilities — a category spanning chips, computing infrastructure, and the development and deployment of AI models.

Under terms of the deal, Alibaba is offering approximately 710 million ordinary shares at HK$112.70 each, a 3.6 percent discount to the closing price of its American depositary receipts the previous Friday. The offering ranks as the world's third-largest primary follow-on share sale so far this year, trailing only Alphabet's $80 billion raise in June and Intel's $15 billion sale in August. Morgan Stanley, HSBC, UBS and CICC are acting as joint bookrunners, and the placement was structured as an offshore transaction not registered under US securities laws, meaning American investors are not eligible to participate.

Demand for the offering reportedly exceeded its initial size, prompting Alibaba to increase the deal, with strong interest including from sovereign wealth funds, according to people familiar with the matter. The raise comes days after Alibaba reported its June-quarter results, in which cloud and AI revenue growth accelerated to 45 percent year-on-year and AI-related product revenue delivered triple-digit growth for a twelfth consecutive quarter — even as net profit fell 75 percent from a year earlier as AI-related capital expenditure surged 75 percent to roughly CNY 67.7 billion (about $10.1 billion) for the quarter.

“We delivered a strong quarter, driven by the improving commercialization of our full-stack AI capabilities,” Alibaba chief executive Eddie Wu said in the company's earnings statement, pointing to newly launched frontier language, coding, video, audio, image and music models, alongside QwenWork, an AI workforce agent the company has positioned as a productivity tool for enterprise customers. Wu has separately said Alibaba needs to build sufficient computing capacity before it can capture the future growth it is targeting — a rationale that frames the heavy near-term spending, and its drag on profitability, as a deliberate and necessary trade-off.

The raise places Alibaba squarely alongside the world's largest technology companies in committing outsized capital to chips, data centres and cloud infrastructure: the four major US hyperscalers — Microsoft, Amazon, Alphabet and Meta — are together expected to spend roughly $725 billion on capital expenditure in 2026, much of it tied to AI data centres, chips and cloud infrastructure. New shares from the placement will carry a 90-day lockup period, according to deal terms.

The fundraising drew an early rebuke from prominent short-seller Michael Burry, who has separately voiced scepticism about the sustainability of the broader AI capital expenditure boom. The core question the raise leaves open, as one analysis of the deal put it, is not whether Alibaba can raise capital — that much is now settled — but whether capital deployed into AI infrastructure in 2026 will translate into a defensible competitive position by 2028 and beyond, a case that for now can only be made through commitment rather than results.