Alibaba founder Jack Ma has invested over HKD600 million (approximately USD76.5 million) to increase his ownership stake in the company, according to sources familiar with the matter. The recent share acquisitions were made over the past two days as a demonstration of his confidence in Alibaba’s future growth in artificial intelligence technology.
In a recent regulatory filing, Alibaba disclosed that Chairman Joseph Tsai and CEO Eddie Wu each purchased around HKD200 million worth of shares during the same period, signaling their support for the company’s strategic direction.
The last time both Ma and Tsai increased their holdings was in 2024, during a challenging period marked by intense competition in the e-commerce sector and the abandonment of plans to spin off Alibaba Cloud. This move was seen as a way to signal to the market that Alibaba was undervalued.
On August 23, Alibaba announced plans to raise HKD80 billion (about USD10.2 billion) via a discounted share offering to fund its expansion into artificial intelligence. The company aims to sell 710 million new shares at HKD112.70 (roughly USD16.76) each, offering a discount of approximately 9% compared to the average closing price over the previous five days.
The share offering, which was executed today, attracted long-term investors including major sovereign wealth funds, ultimately resulting in nearly three times oversubscription.
In recent years, Alibaba has steadily increased its investment in AI, developing an end-to-end AI ecosystem that includes infrastructure, chip development, models, and applications. Products related to AI generated an annualized revenue of CNY49.5 billion (around USD7.4 billion) in the June quarter, with projections indicating it could reach USD10 billion in revenue by the September quarter, according to Wu.
The company aims for Alibaba Cloud’s external revenue to hit USD100 billion by 2030, with a profit margin of 20%. Management expects the capital investments in AI to be recovered within two to three years.
Alibaba’s shares (HKG: 9988; NYSE: BABA) closed at HKD117.40, up 2.8%, in Hong Kong today, and increased 0.8% to USD119.44 in New York yesterday. However, on August 24, the stock declined 8.5% in Hong Kong and 0.7% in New York following the announcement of the share placement.