Alibaba Group Holding Ltd. is spearheading a wave of fundraising among Chinese tech giants, as companies ramp up investments amid rising competition in artificial intelligence.
The company is seeking to raise $3.17 billion in an offering of zero-coupon convertible notes that’s set to be the year’s biggest, News.Az reports, citing Bloomberg News.
The Chinese e-commerce company’s notes due 2032 will convert into its American depositary receipts, according to terms of the deal seen by Bloomberg News.
Investors have expressed interest for multiple times the deal size, and the company stopped taking orders from Asia investors at 1 p.m. Hong Kong time, according to people familiar with the matter.
The huge appetite for cash among Chinese tech giants is a sign of the bruising competition in the sector, where companies are piling billions of dollars into cloud computing, AI, and even food delivery.
Earlier this week, another Chinese tech giant Baidu Inc. raised 4.4 billion yuan ($618 million) from a dim sum bond offering, following a 10 billion yuan issuance in March. Tencent Holdings Ltd. is considering its first public debt offering in four years with a sale of offshore yuan bonds as early as this month. Meituan is also exploring a potential dim sum bond offering.
The proceeds from Alibaba’s convertible bonds will be spent on various purposes, including scaling up its data centers, upgrading technology and expanding international commerce operations, the terms show. The Hangzhou-based company said earlier this year it will spend $53 billion over three years on AI infrastructure such as data centers in an ambitious bid to become a leader in artificial intelligence.
Alibaba didn’t immediately respond to a request for comment.
