Alibaba Shares Fall Sharply After $10.2 Billion Share Sale to Fund AI Expansion

Alibaba shares tumbled as much as 10% in Hong Kong trading after the company priced an 80 billion Hong Kong dollar share placement, worth around $10.2 billion, aimed at non-U.S. investors. The tech giant confirmed that all proceeds will go directly toward strengthening its AI infrastructure and expanding its full-stack AI capabilities.

Timing Raises Investor Concerns

The new shares were priced at HK$112.70 each, well below Friday’s closing price of HK$123, pushing the stock down over 8% following the announcement. The move comes just days after Alibaba reported a steep 75% drop in quarterly profit, largely due to heavy AI-related spending, with capital expenditure jumping 75% to 67.7 billion yuan.

Part of a Wider AI Investment Push

Alibaba had previously pledged to invest at least 380 billion yuan in AI and cloud infrastructure over three years. Rivals like Tencent are also ramping up spending, reflecting an industry-wide race to expand AI capacity across China’s tech sector.