Alibaba has revealed plans to raise $3.2 billion through a zero-coupon convertible bond, the largest such deal in 2025 and overtaking DoorDash’s $2.75 billion issuance in May.
The company said most of the proceeds, about 80%, will be directed toward strengthening its cloud business, with investments in new data centres, technology upgrades, and improved customer services.
The remainder will go into pushing Alibaba’s international e-commerce strategy, as the group doubles down on both cloud infrastructure and overseas markets.
According to deal terms, the bond carries a conversion premium of 27.5% to 32.5% above Alibaba’s U.S.-listed shares and matures on 15 September 2032. Investors will have the option of converting into U.S.-listed stock, a move that has raised concerns about potential dilution.
This worry was seen in New York trading on Wednesday, where the stock dropped 2.2%. In Hong Kong, however, the shares reversed earlier losses to close 2.3% higher at HK$146.10. Year to date, Alibaba’s stock has surged more than 70% in both markets.
CEO Eddie Wu noted the role of artificial intelligence in the group’s future growth during a recent earnings call, saying: “Our investments in AI have begun to yield tangible results. We are seeing an increasingly clear path for AI to drive Alibaba’s robust growth.”
The funding comes as Alibaba executes a commendable AI strategy. The firm has pledged ¥380 billion ($53.37 billion) over three years to strengthen its place in the global AI infrastructure race, rolling out products such as the Tongyi Qianwen 2.0 large language model and AI-powered tools for cloud, logistics, and retail.
This is not Alibaba’s first time tapping the bond market. In July, the company raised $1.5 billion through an exchangeable bond, following a $5 billion convertible bond deal last year.
On the same day as Alibaba’s announcement, China Pacific Insurance also revealed plans for a HK$15.55 billion ($2 billion) zero-coupon convertible bond, underlining the growing appeal of this fundraising route.
Asia-Pacific markets have already seen $27.8 billion worth of convertible bond issuance in 2025, only slightly below last year’s level, which was the strongest in three years. Convertible bonds remain attractive for growth-focused companies as they combine low interest costs with the potential for equity gains.
Alibaba’s investment stresses the scale of capital Chinese technology firms are now deploying to compete globally.
With Amazon Web Services, Microsoft Azure, and Google Cloud topping the sector, Alibaba’s latest fundraising shows it is unwilling to cede ground in what has become one of the fiercest technology battles worldwide.
