Alibaba’s $10.2B Hong Kong share sale fuels AI ambitions

Alibaba is raising $10.2B in Hong Kong’s largest share sale, offering 710M shares at a 3.6% discount. Proceeds will fund AI, amid a 75% profit drop and strong investor demand.

Alibaba has initiated a record-breaking HK$80 billion ($10.2 billion) share placement in Hong Kong, offering 710 million ordinary shares at HK$112.70 each—a 3.6% discount to the latest closing price. This is the largest-ever primary follow-on offering by a Hong Kong-listed company and the third-largest globally in 2024. All net proceeds will be allocated to full-stack AI development, including chip design, infrastructure, and AI model deployment. The offering, structured as an offshore transaction, excludes US investors and targets international institutional buyers. Strong demand led to an increase in the offering size, with sovereign wealth funds among the major participants. The announcement came alongside a 75% year-over-year drop in Alibaba’s net profit, attributed to significant AI-related capital expenditures. Following the news, Alibaba’s stock declined by 8.57%. The deal is managed by Morgan Stanley, HSBC, UBS, and China International Capital Corp.