Chinese big tech giant Alibaba has initiated a stock offering to raise 80 billion Hong Kong dollars (approx. 14.1 trillion won) on the Hong Kong Stock Exchange, according to Reuters and other reports.

Alibaba stated, "We plan to invest the entire raised capital into strengthening our AI capabilities, including the expansion and enhancement of artificial intelligence (AI) infrastructure."

Alibaba CEO Eddie Wu said, "To achieve corporate growth, we must step up investments to build up our computing capabilities."

This stock offering by Hong Kong-listed Alibaba is a seasoned equity offering targeting investors outside the United States.

Alibaba plans to issue 710 million ordinary shares at 112.70 Hong Kong dollars per share.

This represents a 3.6% discount compared to the recent closing price.

Sources reported that Alibaba increased the size of the offering as orders were oversubscribed.

Last week, while announcing its second-quarter (April to June) earnings, Alibaba stated that it had already executed nearly half of its three-year capital expenditure (Capex) plan.

During a conference call, CEO Wu mentioned that there is an industry consensus that the shortage of AI computing power will not change significantly before 2030, adding that he expects investments in AI computing power for Alibaba's cloud division to be recouped within two and a half to three years.

Alibaba's second-quarter net profit dropped 75% year-on-year to 10.4 billion yuan (approx. 2.1 trillion won), which was analyzed as a result of expanded AI capital expenditures.

Capital expenditures for the second quarter surged 75% year-on-year to 67.7 billion yuan (approx. 13.9 trillion won).

(Photo: AP, Yonhap News)