Profit falls 76% as Chinese tech giant accelerates infrastructure spending
Alibaba said in its Sunday announcement that gross proceeds from the placement will total HK$80.0 billion, equivalent to US$10.2 billion, assuming all 710 million shares are placed. The shares amount to roughly 3.70% of the total in issue when the placement agreement was reached.
The shares are offered to investors outside the U.S. at HK$112.70 each, a discount from the stock’s last close of HK$123.00 in Hong Kong.
The Hangzhou-based company said it plans to use 100% of net proceeds from the placement to invest in its “full-stack AI capabilities, including infrastructure.”
The placement is expected to close Wednesday. CICC, HSBC, Morgan Stanley and UBS are among the banks managing the placement.
The capital raise comes against a backdrop of sharply reduced profitability. Net profit fell 76% in Alibaba’s fiscal first quarter, the company reported last week, as continued investment in AI infrastructure pushed capital expenditure sharply higher. Alibaba’s Hong Kong-listed shares, traded under code 9988, were indicated down 9.51% on Monday.
Alibaba has been spending heavily on AI, the company said. The company has continued upgrading its flagship Qwen series and recently rolled out the Qwen3.8-Max, one of the world’s largest open-source models, according to the announcement. Alibaba is operating in a market where Chinese companies are rolling out increasingly sophisticated AI models at a rapid pace, the company said.