Alibaba Group Holding is raising $10.2 billion through a new share placement to bolster its full-stack artificial intelligence capabilities.
Alibaba Group Holding is raising 80 billion Hong Kong dollars ($10.2 billion) through a new share placement to investors outside the U.S. The administration announced that all proceeds from this sale will be invested into the company's full-stack AI capabilities, which include chips, infrastructure, and the development of AI models. This deal represents the largest-ever primary follow-on offering by a Hong Kong-listed company. The offering has drawn strong interest from sovereign wealth funds, with demand exceeding the initial sale size. While Alibaba's capital spending has climbed to nearly 10 billion, the company expects the payback period for AI investments to shorten to 2.5 years due to surging demand. Chief Executive Eddie Wu is also pruning non-core assets, such as the gaming arm Lingxi Games, to fund this pivot. The goal is to maintain a lead over U.S. rivals in the global AI race.