Alibaba Group will raise about $10.2 billion through a placement of new shares to fund the expansion of its artificial intelligence (AI) infrastructure and capabilities, as the Chinese technology giant accelerates investment in AI and cloud computing.
The company said on Sunday that it would issue 710 million new shares at HK$112.70 ($14.40) each, representing about 3.57% of its enlarged share capital. The placement is expected to raise net proceeds of approximately $10.17 billion.
Alibaba’s Hong Kong-listed shares fell 10.2% to HK$110.40 ($14.11) by 02:21 GMT on Monday, trading below the proposed issue price.
The placement is expected to close on August 26, subject to customary conditions. The shares will be offered to at least six professional, institutional or other investors outside the United States.
Alibaba said 100% of the net proceeds would be allocated towards strengthening its global AI capabilities, including the expansion and enhancement of its AI infrastructure.
The fundraising comes as Alibaba steps up spending on AI and cloud computing amid intensifying competition across China’s technology sector.
The newly issued shares will rank equally with Alibaba’s existing shares. The company has also agreed to a 90-day lock-up period following completion of the placement.
The capital raising underscores Alibaba’s growing commitment to AI as it seeks to strengthen its position in one of the technology industry’s most competitive and rapidly developing areas.
