Alibaba plans $10 billion Hong Kong share placement to fund AI spending

Last week, Alibaba reported its results for the April-to-June quarter, saying it had already spent nearly half of its three-year capex investment plan. It said its expected payback on AI-related investments was on track to fall to 2.5 years from 3 years, driven by surging demand.

Alibaba’s net profit for the quarter fell 75% from a year earlier as it ramped up its AI-related capital expenditures.

"In order to be able to capture that future growth, we first need to make these capex investments to build out the necessary compute capacity," CEO Eddie Wu said on an earnings call.

The company’s share offering has been met with strong demand from investors, including sovereign wealth funds, two people familiar with the deal told Reuters. They could not be named because the information was not public.

Alibaba increased the size of the offering after the deal was oversubscribed, the people familiar with the matter said.