24 August 2026
Alibaba raises $10.2 billion for AI as profits drop 75 percent
First reported
CNBC ran this on , 4 days before the other 3 sources picked it up.
- Alibaba's June quarter profit fell 75 percent due to heavy spending on AI infrastructure, including computing capacity and chips.
- The company raised $10.2 billion through a new share offering, with proceeds earmarked entirely for AI infrastructure and capabilities.
- Capital spending jumped 75 percent to roughly $10 billion in the quarter, while revenue still grew 9 percent year-over-year.
- Alibaba's cloud division, key to monetizing AI, grew 45 percent and delivered triple-digit growth in AI products for the twelfth consecutive quarter.
Where they differ
Prompt Engineering Daily focused on the fundraising mechanics and framed this as a capital allocation question, while The Neuron combined Alibaba and Tencent spending into a single figure and emphasized the CEO's claim about three-year payback, though both newsletters reported the same underlying profit decline.
Alibaba is raising $10.2 billion through a share placement specifically for AI infrastructure and capabilities, with shares discounted 8.4 percent. The newsletter notes this comes as quarterly net profit fell 75 percent due to AI spending, and frames AI infrastructure investment as increasingly a capital-allocation question rather than purely a technology decision.
Alibaba and Tencent combined spent 18 billion dollars on AI infrastructure in the last quarter, a figure so substantial it caused Alibaba's profit to drop 75 percent despite the CEO claiming the investment will pay for itself within three years.