Alibaba leads China tech funding spree with $4 billion deal
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Alibaba is seeking to raise US$3.17 billion (S$4 billion) in an offering of zero-coupon convertible notes that’s set to be the year’s biggest.
PHOTO: REUTERS
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BEIJING - Alibaba Group Holding is leading a fund-raising spree among Chinese tech giants, driven by soaring capital demands amid intensifying competition in artificial intelligence (AI).
The company is seeking to raise US$3.17 billion (S$4 billion) in an offering of zero-coupon convertible notes that is set to be the year’s biggest. The Chinese e-commerce company’s notes due 2032 will convert into its American depositary receipts (ADRs), according to terms of the deal seen by Bloomberg News.
Earlier this week, another Chinese tech giant, Baidu, priced its second batch of a 4.4 billion yuan (S$793 million) dim sum bond offering, following a 10 billion yuan issuance in March. Meanwhile, Tencent Holdings is considering its first public debt offering in four years, with a sale of offshore yuan bonds as early as September.
The companies’ efforts underscore the aggressive investment cycle in China’s tech sector to fuel growth in cloud, AI, and market share for traditional arenas like food delivery. Fund-raising triggers risks of higher debt and stock volatility, but long-term success depends on how the capital will be used to drive growth amid fierce competition.
Alibaba is raising the funds for purposes including scaling up its data centres, upgrading technology and expanding international commerce operations, the terms show. The company said earlier in 2025 that it will spend US$53 billion over three years on AI infrastructure such as data centres in an ambitious bid to become a leader in AI.
The company is in fierce competition for Chinese consumers, pitting it against rivals including Meituan and JD.com. Earlier this week, Alibaba committed another 1 billion yuan of incentives to drive more traffic to one of its most popular online services.
Asian sales of bonds that can turn into shares have soared in 2025 and are heading towards multi-year highs. The instrument offers a cheaper way to raise cash than traditional debt, especially as interest rates are elevated and rallying stocks create the right conditions for this corner of the market to thrive.
China Pacific Insurance (Group) is also tapping the convertible bond market by raising HK$15.6 billion (S$2.6 billion) from the instrument.
Alibaba raised US$5 billion in convertible bonds in 2024, a record dollar-denominated issue by an Asian company at the time. In July, it raised HK$12 billion from the sale of bonds exchangeable into shares of a unit, Alibaba Health Information Technology.
Alibaba shares fell as much as 2.6 per cent to HK$139.10 on Sept 11 in Hong Kong after its ADRs fell in the US. The stock has climbed about 70 per cent in 2025. BLOOMBERG
