Alibaba raises US$10B in new shares to fund full-stack AI
Alibaba is issuing HK$80 billion (US$10.2 billion) in new shares with every dollar routed to full-stack AI — chips, computing infrastructure, large language models, and applications — after pre-launch orders from sovereign wealth funds and long-only investors exceeded the original deal size. The raise is backed by real demand rather than a roadmap promise: cloud and AI revenue grew 45% year on year last quarter while capital expenditure jumped 75% to 67.7 billion yuan, and CEO Eddie Wu Yongming expects the AI compute investment to break even in two to three years.
Source: scmp.com ↗
Alibaba was expecting its investments in AI computing to break even within three years, with the payback period potentially shortened to about two years as gross margins continued to rise.
Why this matters
- → Alibaba betting $10B on AI infrastructure signals confidence in near-term compute ROI
- → Full-stack play (chips to models) reduces dependence on US suppliers amid geopolitical tension
- → 45% YoY cloud revenue growth justifies massive capex despite near-term margin pressure