Alibaba Group Holding Limited announced the placement of $80 billion HK for 710 million newly issued ordinary shares to non-U.S. investors outside the U.S. The price is $112.70 HK per placement share and is expected to close Aug. 26.

“The equity placement is being undertaken to extend the company’s global AI leadership,” the company said in a statement Monday. “Alibaba intends to use 100 percent of the net proceeds from the equity placement to invest in its full-stack AI capabilities, including to expand and enhance its AI infrastructure.”

In Hong Kong, shares fell more than 8 percent on the news. In the U.S., shares fell 1.5 percent in the morning trading session to $117.70. The stock’s 52-week high is $192.67, and the 52-week low is $91.99.

Alibaba follows Alphabet (Google parent company), Amazon and Meta Platforms who are raising money via equity and bonds for building AI infrastructure—including data centers. In June, Alphabet alone said it was raising close to $85 billion in equity to fortify its AI efforts.

In China, Alibaba is the number one cloud provider. The company has been working to create its Qwen large language models (LLMs) to help it take the world stage. Last year, executives at the group said it was expecting to invest more than $50 billion to build out its AI infrastructure.

Last week, Alibaba reported a 9 percent revenue gain for the quarter ended in June. The gain was bolstered by a 45 percent increase in the company’s AI Cloud and Compute businesses. Still, earnings fell more than 40 percent due to its heavy AI investments.

In the report, the company said customer management revenue dropped 7 percent year-over-year, and income from operations declined of 57 percent, which the company said was primarily due to the declined in adjusted EBITA, impairment of goodwill and a provision recorded this year.

Still, the tech giant said it had a good quarter. Eddie Wu, chief executive officer of Alibaba Group, said the company “delivered a strong quarter, driven by the improving commercialization of our full-stack AI capabilities. Alibaba Cloud’s external revenue growth accelerated to 45 percent, with AI-related product revenue delivering triple-digit growth for the twelfth consecutive quarter.”

Wu went on to say the company recently launched “frontier language, coding, video, audio, image and music models, all delivering top-tier performance. We introduced QwenWork, an AI workforce agent that unleashes enterprise productivity and capabilities. With our full‑stack AI strategy, we have put Alibaba in a superior position to capture the substantial growth of demand for artificial intelligence and AI compute.”

Toby Xu, Alibaba Group’s chief financial officer, said there was revenue growth and margin gains across the company’s core businesses. “As synergies across our core businesses deepen and AI monetization ramps up, we have greater strategic and financial flexibility to make disciplined and sustained investments in full-stack AI capabilities,” Xu noted.