Alibaba Plans To Raise $3.2 Billion Through Convertible Bond As It Doubles Down On Cloud Expansion And $53 Billion AI Investment Drive

On Thursday, Alibaba Group Holding Ltd. (NYSE:BABA) said that it will raise $3.2 billion through a zero-coupon convertible bond.

Alibaba shares slipped 2.16% in Wednesday's regular session and declined a further 0.40% in after-hours trading, according to Benzinga Pro data.

Funding Cloud And Global Growth

The e-commerce and technology giant said nearly 80% of the proceeds will go toward expanding data centers, upgrading technology and improving services.

The remaining 20% will support international e-commerce ventures, including AliExpress, Lazada and Trendyol, which have been growing rapidly overseas despite remaining smaller than their domestic operations.

The senior note, set to mature on Sept. 15, 2032, will be convertible into Alibaba's U.S.-listed shares.

The deal follows a $1.5 billion exchangeable bond issued in July and a $5 billion convertible bond sold in May 2024.

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AI As A Growth Engine

Alibaba has pledged to invest 380 billion yuan ($53 billion) over three years in artificial intelligence and related technologies.

That commitment is already fueling momentum in its Cloud Intelligence Group, which posted 26% revenue growth to $4.66 billion in the latest quarter.

China's Cloud Market Expands

Alibaba's financing move comes as China's cloud infrastructure spending surged 16% year-over-year to $11.6 billion in the first quarter of 2025, according to Canalys. The market is expected to grow from $40 billion in 2024 to $46 billion in 2025, driven largely by enterprise adoption of AI.

Alibaba Cloud maintained its lead with a 33% market share, followed by Huawei Cloud at 18% and Tencent (OTC:TCEHY) Cloud at 10%, with the latter's growth limited by GPU supply shortages.

Benzinga's Edge Stock Rankings indicate that BABA continues to demonstrate a steady upward trajectory across short, medium and long-term horizons, with additional performance details available here.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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