The company plans to use the proceeds to support AI-related development and infrastructure as it steps up investments amid intensifying competition and ongoing Sino-U.S. technology tensions.Alibaba shares fell as much as 10% to HK$110.10 in early Hong Kong trading.The placement is the largest-ever primary follow-on offering by a Hong Kong-listed company and the third-largest globally this year, behind offerings by Alphabet and Intel.Investor concerns over dilution and the scale of Alibaba’s capital expenditure have added to broader market questions about when huge investments in AI infrastructure will begin generating meaningful returns.
Reuters reported that investors have increasingly raised similar concerns in the United States as technology companies continue to commit billions of dollars to AI development.The share sale comes a week after Alibaba reported its quarterly results and said it had already deployed nearly half of its three-year capital expenditure plan.
The company also brought forward its expected payback period on AI investments to two and a half years from three years, citing strong demand for AI services.Despite the expected acceleration in demand, Alibaba’s quarterly net profit plunged 75% from a year earlier, primarily due to higher AI-related spending.Alibaba is also expanding its AI infrastructure overseas.
