--- title: Alibaba's profit sinks 75% as it doubles down on AI,... description: Alibaba's net profit dropped 75% to $1.54 billion in the June quarter despite cloud revenue growing 45%, its fastest pace in 22 quarters. The gap is driven by... canonical: https://daily.dev/posts/alibaba-s-profit-sinks-75-as-it-doubles-down-on-ai-then-raises-10-2b-more-to-spend-wwaki3lct twitter:card: summary_large_image twitter:site: @dailydotdev og:type: website og:site_name: daily.dev og:title: Alibaba's profit sinks 75% as it doubles down on AI, then raises $10.2B more to spend | daily.dev og:description: Alibaba's net profit dropped 75% to $1.54 billion in the June quarter despite cloud revenue growing 45%, its fastest pace in 22 quarters. The gap is driven by... og:url: https://daily.dev/posts/alibaba-s-profit-sinks-75-as-it-doubles-down-on-ai-then-raises-10-2b-more-to-spend-wwaki3lct og:image: https://api.daily.dev/og/posts/wWAKI3Lct.png og:image:alt: Alibaba's profit sinks 75% as it doubles down on AI, then raises $10.2B more to spend og:image:width: 1200 og:image:height: 630 og:locale: en --- > ## Documentation Index > Fetch the complete documentation index at: https://daily.dev/llms.txt > Use this file to discover all available pages before exploring further. # Alibaba's profit sinks 75% as it doubles down on AI, then raises $10.2B more to spend **[Collections](https://daily.dev/sources/collections)** · 1 min read · 3 upvotes · 0 comments ## Summary Alibaba's net profit dropped 75% to $1.54 billion in the June quarter despite cloud revenue growing 45%, its fastest pace in 22 quarters. The gap is driven by AI capital expenditure of $9.98 billion, up 75% year over year, plus a $2.04 billion loss in the new AI Labs and Applications unit housing Qwen, a €550 million EU fine, and a $657 million goodwill impairment. Days later, Alibaba announced a HK$80 billion (~$10.2 billion) Hong Kong share placement, with all proceeds earmarked for AI infrastructure, marking a reversal from the $11.9 billion in buybacks it did in fiscal 2025. The company owns Qwen, cloud infrastructure, and proprietary AI chips, and targets $100 billion in combined cloud and AI revenue within five years, even as core e-commerce revenue shrinks and EU sovereignty rules threaten its European cloud expansion. ## Content Alibaba just spent a week doing three things that only make sense together: raising $10.2 billion, watching quarterly profit fall off a cliff, and shipping a new video generation model. Here's how the pieces fit. ## The raise Alibaba is selling HK$80bn (about $10.2 billion) in new shares on the Hong Kong exchange, and it says every dollar of net proceeds goes to AI — infrastructure buildout and "full-stack" AI capabilities. It's the largest primary follow-on offering ever by a Hong Kong-listed company, and the largest Regulation S equity offering on record. Globally this year, only Alphabet's $85bn raise and Intel's offering were bigger. What makes this notable isn't just the size. Alibaba spent $11.9 billion buying back its own stock in fiscal 2025, cutting shares outstanding by 5.1%. Now, roughly a year later, it's issuing new shares and accepting dilution to fund the next round of AI spending. Those two moves don't contradict each other exactly, but they do show how fast the company's capital priorities have shifted. Buying back stock says ## Questions this post answers ### How much did Alibaba raise in its recent Hong Kong share offering and what is it for? Alibaba raised HK$80 billion, roughly $10.2 billion, by selling new shares on the Hong Kong exchange. The company said every dollar of net proceeds would go toward AI, covering infrastructure buildout and full-stack AI capabilities. It ranks as the largest primary follow-on offering ever by a Hong Kong-listed company and the largest Regulation S equity offering on record. _Track how major cloud players are funding AI infrastructure buildouts on daily.dev._ ### Why did Alibaba's quarterly profit drop while it raised billions for AI spending? Alibaba's quarterly profit sank 75% even as it raised $10.2 billion specifically to expand AI infrastructure and capabilities. The company appears to be prioritizing long-term AI investment over near-term earnings, a reversal from fiscal 2025 when it spent $11.9 billion buying back stock and cutting shares outstanding by 5.1%. _Compare how AI spending is reshaping corporate financial priorities via daily.dev._ ## Similar posts on daily.dev - [Alibaba sells its Lingxi games arm to fund an all-in bet on AI](https://daily.dev/posts/alibaba-sells-its-lingxi-games-arm-to-fund-an-all-in-bet-on-ai-hpxbd0mbc) · The Next Web · 0 upvotes · 0 comments - [Chinese profits rose 25.7%. The CSI 300 fell 9% and the Star 50 fell 29%](https://daily.dev/posts/chinese-profits-rose-25-7-the-csi-300-fell-9-and-the-star-50-fell-29--mli6gogwu) · The Next Web · 0 upvotes · 0 comments - [AI voice startup ElevenLabs doubles valuation to $22B](https://daily.dev/posts/ai-voice-startup-elevenlabs-doubles-valuation-to-22b-4sb196mrh) · TechCrunch · 0 upvotes · 0 comments - [OpenAI closes record-breaking $122 billion funding round as anticipation builds for IPO](https://daily.dev/posts/openai-closes-record-breaking-122-billion-funding-round-as-anticipation-builds-for-ipo-3jcvs1txl) · Hacker News · 1 upvotes · 0 comments --- Tags: [#cloud](https://daily.dev/tags/cloud), [#ai-infrastructure](https://daily.dev/tags/ai-infrastructure), [#qwen](https://daily.dev/tags/qwen), [#alibaba](https://daily.dev/tags/alibaba) [View this post on daily.dev](https://daily.dev/posts/alibaba-s-profit-sinks-75-as-it-doubles-down-on-ai-then-raises-10-2b-more-to-spend-wwaki3lct) ```json {"@context":"https://schema.org","@graph":[{"@type":"Organization","@id":"https://daily.dev/#organization","name":"daily.dev","url":"https://daily.dev","logo":{"@type":"ImageObject","url":"https://daily.dev/apple-touch-icon.png","width":180,"height":180},"sameAs":["https://twitter.com/dailydotdev","https://github.com/dailydotdev","https://www.linkedin.com/company/daily-dev-ltd"]},{"@type":"WebSite","@id":"https://daily.dev/#website","url":"https://daily.dev","name":"daily.dev","publisher":{"@id":"https://daily.dev/#organization"},"potentialAction":{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https://daily.dev/search?q={search_term_string}"},"query-input":"required name=search_term_string"}}]} {"@context":"https://schema.org","@type":"TechArticle","headline":"Alibaba's profit sinks 75% as it doubles down on AI, then raises $10.2B more to spend","url":"https://daily.dev/posts/alibaba-s-profit-sinks-75-as-it-doubles-down-on-ai-then-raises-10-2b-more-to-spend-wwaki3lct","mainEntityOfPage":{"@type":"WebPage","@id":"https://daily.dev/posts/alibaba-s-profit-sinks-75-as-it-doubles-down-on-ai-then-raises-10-2b-more-to-spend-wwaki3lct"},"datePublished":"2026-08-23T14:17:35.550Z","dateModified":"2026-09-13T19:50:22.359Z","description":"Alibaba's net profit dropped 75% to $1.54 billion in the June quarter despite cloud revenue growing 45%, its fastest pace in 22 quarters. 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