Night view of the Alibaba headquarters building located along the Huangpu River in Shanghai, China, Nov. 16, 2025. CFOTO | Future publications | Getty Images Alibaba shares plunged as much as 10% in Hong Kong on Monday after the Chinese tech giant priced a HK$80 billion ($10.2 billion) placement of newly issued shares to non-U.S. investors. The company said it plans to use all net proceeds to invest in its full AI capabilities, including expanding and improving its AI infrastructure. Alibaba will issue 710 million new shares at HK$112.70 each, compared with Friday’s closing share price of HK$123. The shares were last trading 8.4% lower at HK$112.7. The share placement, which is expected to close on Wednesday, comes just days after Alibaba reported a 75% drop in profits for the June quarter as heavy spending on AI hit its results. Capital expenditure increased 75% to 67.7 billion yuan. Vey-Sern Ling, senior equity advisor at UBP, told CNBC last week, following Alibaba’s latest earnings, that the company was well positioned to pursue AI growth. “I think Alibaba is clearly well positioned to pursue that growth, given that they have a very strong cloud computing arm and AI model,” he said, adding that profits could weaken in the near term, while capital spending could increase. Alibaba has been increasing investment in AI as it seeks to make the technology a key driver of future growth. The company last year announced plans to invest at least 380 billion yuan in cloud computing and AI infrastructure over the next three years. Alibaba’s Chinese tech peers have also been increasing spending on AI. Tencent’s capital spending rose 65% from the previous quarter to 52.8 billion yuan in the June quarter, as the company continued to invest in computing infrastructure to monetize its AI models. Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.
