Ali Baba plans to finance new shares in Hong Kong by approximately $10.2 billion, with net proceeds going to AI-wide capacity-building, including the development and deployment of computing infrastructure, chips and artificial intelligence models. The deal is expected to be one of the largest levels of follow-up financing for Hong Kong companies.

Share-sharing discount 3.6 per cent

According to the disclosure, Aribaba proposes to issue 710 million shares of general shares at a price of HK$ 112.70 per share, which represents a 3.6 per cent discount on the previous date of trade. It was mentioned that, with stronger demand for subscriptions, companies had expanded their distribution and sovereign wealth funds were among intended investors.

The distribution was managed by Morgan Stanley, HSBC, SB and SKG. For Ali Baba, this financing will provide more funding space for its continued expansion of AI and cloud infrastructure.

Capital expenditures rose to 67.680 billion yuan.

The financing context is that of corporate AI, which has a clear acceleration of related inputs. In June, Aribaba ' s quarterly capital expenditure increased by approximately 75 per cent over the same period, to RMB 67.688 billion, or close to $10 billion, mainly to expand data centre capacity and to cover the higher cost of chip purchases.

While spending is rising rapidly, the net profits of companies fall by about 75 per cent to 10.5 billion yuan yuan per year. In other words, AI inputs are significantly pushing up the consumption of funds and putting pressure on short-term financial performance.

Clouds and AI income continues to grow

However, the fastest-growing technology operations in Ali Baba remain in demand. Reports indicate that AI ' s income from cloud and computing services increased by 45 per cent, to approximately $7.1 billion; AI ' s income from related products also increased by three digits over a single quarter.

Ali Baba promised to invest 380 billion yuan in cloud and AI infrastructure by 2029 and is now about half. As the current round of finance advanced, the market then became more concerned about whether clouds and AI revenues could continue to accelerate growth and support growing capital demand.

Global AI capital input warming

This financing also reflects a common trend in the global science and technology industry: AI competition has become more than just model and software competition, and increasingly depends on chips, data centres, electricity and financing capabilities.

The report mentions that American technology companies are also facing similar pressures. The market is looking at how much continued funding is needed for AI infrastructure expansion, and some former Bitcoin mining companies are moving data centre capacity to AI calculations. The financing of Ali Baba is the latest in this round of AI capital competition.