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China\u2019s Alibaba on Sunday launched a HK$80-billion ($10.2 billion) \u200bshare placement to fund artificial intelligence-related development.<\/strong><\/p>\n A deal by the Chinese e-commerce and cloud computing giant would \u200cmark the largest-ever primary follow-on offering by a Hong Kong-listed company.<\/span><\/p>\n It would rank as the world\u2019s third-largest primary follow-on share sale this year after offerings from Alphabet and Intel.<\/span><\/p>\n The company said it intends to use 100% of the net proceeds from the placement to invest in \u200bits \u201cfull stack\u201d AI capabilities, a category that includes chips, infrastructure and the development and deployment of AI models.<\/span><\/p>\n A \u200bterm sheet reviewed by Reuters showed Alibaba planned to sell 710 million ordinary shares at \u2060HK$112.70 a share. That represented a 3.6% discount to its most recent closing price.<\/span><\/p>\n In its announcement for the $10.2 billion \u200bshare placement, Alibaba did not reveal additional details on its investment plans by category of its planned AI-related investment.<\/span><\/p>\n It did \u200bnot comment beyond its regulatory disclosure.<\/span><\/p>\n 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-Alibaba increased the size of the offering after the deal was oversubscribed, \u200bthe people familiar with the \u200bmatter said.<\/span><\/p>\n Morgan Stanley, HSBC, UBS \u2060and CICC are serving as joint bookrunners of the Alibaba offering, said one of the sources and a third person with knowledge of the matter. The banks did not \u200bimmediately respond to a Reuters request for comment.<\/span><\/p>\n The share placement was not registered under \u200bU.S. securities laws \u2060as an offshore transaction, meaning American investors were not eligible to participate, Alibaba said.<\/span><\/p>\n Since 2022, the global AI boom has fuelled staggering capital outlays on infrastructure and data centers, including in the U.S. and China.<\/span><\/p>\n The four major U.S. hyperscalers \u2013 Microsoft, Amazon, \u2060Alphabet and \u200bMeta- together are expected to spend roughly $725 billion in capital expenditures in \u200b2026, much of it tied to AI data centers, chips and cloud infrastructure.related investments was on track to fall to 2.5 years from \u200b3 years, driven by surging demand.<\/span><\/p>\n Alibaba\u2019s net profit for the quarter fell 75% from a year earlier as it ramped \u200bup its AI-related capital expenditures.<\/span><\/p>\n \u201cIn order to be able to capture that future growth, we first need to make these capex investments \u200cto \u2060build out the necessary compute capacity,\u201d CEO Eddie Wu said on an earnings call.<\/span><\/p>\n