Alibaba Raises $10.2 Billion to Spend Entirely on AI

Alibaba is raising $10.2 billion through a major Hong Kong share placement and notes all net proceeds will be employed to strengthen its AI capabilities, including infrastructure.

Key points

• The firm is placing 710 million new shares at around $14.38 each, representing around 3.6% of its enlarged share capital.
• Capital expenditure jumped 75% to approximately $10.1 billion during the April-June quarter as Alibaba expanded computing capacity and invested in AI infrastructure.
• Add ProPakistani to Preferred Sources and see more of our stories in Google Search and Top Stories.
• Add as a preferredSource on Google Follow on Google News Join WhatsApp.
• Alibaba previously committed approximately $56.5 billion to cloud and AI infrastructure over three years and has already spent roughly half of that amount.

In practice, the firm is placing 710 million new shares at around $14.38 each, representing around 3.6% of its enlarged share capital.

Meanwhile, the offering is the largest primary follow-on share sale ever by a Hong Kong-listed firm and one of the biggest globally this year. Alibaba's New AI Can Run on Laptops, Rivals Models 10x Bigger. Heavy Spending Turning to Expansion.

As spending on AI infrastructure surged, the fundraising comes just days after Alibaba documented a 75% year-on-year drop in quarterly net profit.

Capital expenditure jumped 75% to approximately $10.1 billion during the April-June quarter as Alibaba expanded computing capacity and invested in AI infrastructure. Nevertheless, the spending is additionally driving expansion.

While its AI model services business has reached more than $2.38 billion in annual recurring revenue, revenue from Alibaba's cloud and AI business rose 45% to around $7.2 billion during the quarter.

Alibaba CEO Eddie Wu remarked the business needs to build sufficient computing capacity first to capture future AI expansion. Alibaba to Seek Revenue Share From Major Users of Qwen. Billions Already Committed to AI.

For context, the firm has additionally indicated that its total investment could eventually exceed the original target.

Alibaba is increasingly using its own AI chips in data centres as well. It could support reduce costs and improve margins as deployment expands.

Its AI infrastructure push is additionally extending beyond China. Alibaba Cloud opened two availability zones in Paris in June, giving it a third major European cloud hub after Germany and the UK.

As investors reacted to the dilution from the new share sale and the scale of the company's AI spending, alibaba shares fell around 8% in Hong Kong after the announcement. Stay Connected with ProPakistani.

Obtain the latest tech news, telecom insights, and product launches wherever you prefer. Follow on Google Discover.

Technology and Automotive Specialist covering the latest cars, smartphones, AI breakthroughs, and.

Taken together, the developments around alibaba Raises $10.2 Billion to Spend Entirely on AI point to a situation that is still moving, and the coming days should bring more clarity.