Alibaba is putting every dollar of a massive new capital raise behind artificial intelligence. Whale Insider reported that the company is raising $10 billion through new Hong Kong shares specifically to fund AI investments, a figure Coin Bureau pinned more precisely at $10.2 billion, with all net proceeds earmarked for AI, per the Financial Times.
The Largest Follow-On Offering in Hong Kong's History
The placement, structured as roughly 710 million new ordinary shares priced at a discount to Alibaba's last close, marks the largest-ever primary follow-on offering by a Hong Kong-listed company and ranks as the third-largest primary share sale globally this year, trailing only similar raises from Alphabet and Intel. The proceeds are earmarked for Alibaba's "full stack" AI buildout, spanning custom chips, data-center infrastructure, and the development and deployment of its own models. Because the deal is structured as an offshore transaction outside US securities registration, American investors aren't eligible to participate.
Profit Pressure Behind the Raise
The scale of the raise reflects how much AI spending is already squeezing Alibaba's bottom line. Coin Bureau's reporting noted the move comes just weeks after Alibaba released its Qwen 3.8-Max model, and as the company's net profit fell 75% to roughly $1.5 billion, a drop it attributed directly to surging AI capital expenditure. Rather than pull back, Alibaba is doubling down, betting that the near-term profit hit is the price of staying competitive in a market where every major Chinese tech firm is racing to keep pace with domestic and Western AI labs alike.
Related: Nvidia Pays Poolside $6B to Build a DeepSeek-Rivaling Open Model
Part of a Broader Capital Arms Race
Alibaba's raise lands in the same week Nvidia committed billions to its own open-weight AI push, underscoring how the current cycle isn't just a compute story but increasingly a capital-markets one, with the biggest players on both sides of the Pacific tapping equity markets directly to fund the buildout rather than relying solely on cash flow. For Alibaba specifically, the bet is that a temporary profit hit now buys the infrastructure needed to compete for AI market share over the next several years.
