Alibaba shares fell 8% in early Hong Kong trade on Monday after the tech company finalised a HK$80 billion share placement at HK$112.70 apiece, in a deal aimed at funding artificial intelligence-related development. The Chinese e-commerce and cloud computing company priced 710 million new shares at an 8.4% discount to the last close of its Hong Kong-listed stock.
Alibaba intends to use proceeds to fund AI development, including the expansion of related infrastructure. The share placement comes a week after Alibaba reported quarterly earnings in which it said it had already spent nearly half of its three-year capital expenditure plan.
It brought forward its projected payback on AI investment to two and a half years from three due to surging demand for AI services. Last week, digital technology and AI division Alibaba Cloud launched its third data centre in South Korea, bringing its network to 104 availability zones across 30 regions.
The move was a part of Alibaba's AI infrastructure pledge, announced in October, to invest 380 billion yuan over three years.