Alibaba raises $10.2B for AI infrastructure as its shares fall 10%
Alibaba priced an HK$80 billion placement of new shares, worth about $10.2 billion, to pay for its AI buildout. Investors in Hong Kong didn’t take it well. The stock fell as much as 10% on Monday, which Semafor called its steepest single-day drop in more than a year.
The company issued 710 million new shares at HK$112.70 each to non-U.S. buyers outside the United States, CNBC reported. Friday’s closing price was HK$123, so the placing price sat about 8.4% below it, by our calculation. Alibaba said all of the net proceeds go into its full stack AI capabilities, including expanding and enhancing its AI infrastructure.
That’s vaguer than it sounds until you read the completion filing. In a 6-K dated August 26, Alibaba split the net proceeds two ways. About 60%, or HK$47,871 million, goes to expanding its global computing infrastructure to meet what the company calls accelerating customer demand.
The other 40%, HK$31,914 million, funds hyperscale AI data centers plus an upgrade to storage, databases and high-performance networking, which the filing ties to a comprehensive move to an Agentic Cloud architecture. Alibaba published the placement terms in a pricing announcement on its own newsroom.
| Item | Figure |
|---|---|
| Placement shares | 710,000,000 |
| Placing price | HK$112.70 |
| Friday closing price | HK$123 |
| Size | HK$80 billion (about $10.2 billion) |
| Global computing infrastructure (about 60%) | HK$47,871 million |
| AI data centers and cloud upgrade (about 40%) | HK$31,914 million |
| Completion | August 26, 2026 |
The timing explains the reception, because the placement came days after Alibaba reported a 75% drop in June-quarter profit, with capital expenditure up 75% to 67.7 billion yuan, CNBC reported. Semafor put the wider worry plainly: investors fret that tech revenues are struggling to keep up with the AI spending spree, which has added substantially to corporate debt piles.
If end uses and costs remain so uncertain, the ultimate scale of investment, the financing needs and the eventual payoff remain finger-in-the-wind estimates.
A Reuters columnist, quoted by Semafor
That debt problem is part of why some firms have pivoted to selling equity instead, as Google did in June, according to Semafor. Others have leaned on somebody else’s balance sheet, as when Nvidia guaranteed $105 billion of OpenAI’s leases at an Ohio data center. Anthropic is targeting an IPO of its own.
Still, not everyone reads the raise as a warning. Vey-Sern Ling, senior equity advisor at UBP, told CNBC after the latest earnings that the company was well placed. “I think Alibaba clearly is well positioned to chase that growth, given that they have a cloud computing arm, they have a very strong AI model,” he said, adding that profits might weaken in the near term while capex might rise.
The spending isn’t Alibaba’s alone. Tencent’s capital expenditure rose 65% from the previous quarter to 52.8 billion yuan in the June quarter, per CNBC, because it’s still building compute to monetize its own models. TechNode valued the raise at $10.21 billion.
But one thing stays unresolved. Alibaba said last year it planned to invest at least 380 billion yuan in cloud computing and AI infrastructure over three years, and the placement announcements don’t say whether this HK$80 billion sits inside that plan or on top of it. The US listed shares fell 3.4% in premarket trading. The next real test is the September quarter, when the capex line shows how fast the money is going out.
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