Alibaba plunges after announcing $10.2 billion share placement to fund AI push
Alibaba shares plunged 10% after the tech giant priced a $10.2 billion share placement to fund its growing AI investments.
TL;DR
- Alibaba shares fell up to 10% after pricing an 80 billion Hong Kong dollar ($10.20 billion) placement of new shares.
- Proceeds will be used to invest in full-stack AI capabilities and infrastructure.
- The placement of 710 million new shares was priced at HK$112.70 each, below Friday's closing price.
- The move comes after Alibaba reported a 75% drop in profit and a 75% jump in capital expenditure due to heavy AI spending.
- Alibaba plans to invest at least 380 billion yuan in cloud computing and AI infrastructure over three years.
- Competitor Tencent has also increased its capital expenditure for AI investments.