Alibaba completed a HK$80 billion (US$10.2 billion) secondary share sale in Hong Kong on August 24, 2026, marking its largest-ever follow-on offering by a Hong Kong-listed company [1, 2, 3]. The company issued 710 million new shares at HK$112.70 each, representing an 8.4% discount to the previous Friday's closing price [2, 3]. These new shares account for about 3.7% of Alibaba’s total 19.17 billion outstanding shares [3].
Shares fell between 8% and 10% in early Hong Kong trading on the day of the sale, reflecting investor caution [2, 3]. Despite this, the placement received strong demand with $28 billion in orders, including approximately $6 billion from sovereign wealth and long-only investors [4]. Alibaba CEO Eddie Wu said, "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" [5].
Alibaba plans to dedicate 100% of the proceeds to artificial intelligence development, covering chips, infrastructure, and AI model creation [2, 6]. This secondary offering is the third-largest global follow-on so far in 2026, trailing only behind those by Alphabet and Intel [2, 5]. It supports the company's announced plan to invest 380 billion yuan (about US$56.5 billion) over three years in AI, cloud infrastructure, and data centers [2, 6].
The firm's recent quarterly report showed a 75% year-on-year net profit decline, mainly due to increased AI-related spending [2, 5]. Alibaba Cloud recently launched a third data center in South Korea, expanding its AI infrastructure to 104 availability zones across 30 regions [2].
Some investors expressed concern over dilution and Alibaba's ability to compete in advanced tech, given its e-commerce roots. Yang Tingwu from Tongheng Investment said, "Alibaba's DNA is in e-commerce, not advanced tech. No matter how much it invests in AI hardware, it will likely be outmanoeuvred by competitors in tech innovation" [4]. NYU Law’s Winston Ma noted Alibaba’s offering aligns with large US tech capital raises, "proving that American and Chinese tech giants are operating off the exact same strategic playbook" [4].
Alibaba reported in August 2026 that the payback period for its AI investments has been revised to 2.5 years, down from the prior estimate of three years [2]. The share sale closed on August 24, and Alibaba will continue to advance its AI infrastructure and technology investments in the coming quarters [1, 2].
