By Fabiana Negrin Ochoa and Tracy Qu
Alibaba plans to raise $10.2 billion to invest in artificial intelligence, a move that could sharpen its edge in the field but which has stoked fears of share dilution, sending its stock sharply lower.
The Chinese tech heavyweight said Sunday that it reached an agreement to place 710 million new shares to investors outside the U.S. at 112.70 Hong Kong dollars each. That represented a sharp discount to the stock's close on Friday at HK$123.00.
Assuming all shares are placed, the gross proceeds will be HK$80.0 billion, equivalent to US$10.2 billion, which Alibaba said it will use exclusively to invest in its AI capabilities.
The book was closed within hours, with total demand ultimately reaching US$28 billion, including nearly US$6 billion from sovereign wealth funds and long-only investors, according to a source familiar with the matter.
