"Alibaba Group Holding" leads among Chinese technology giants in fundraising. This is due to the company's increased capital demand amidst growing competition in the field of artificial intelligence.
The company plans to raise $3.17 billion through the issuance of zero-coupon convertible bonds. This will be the largest investment of the year. According to the terms of the agreement, the Chinese company's bonds maturing in 2032 will be converted into U.S. depositary shares.
China's technology giants are eager for cash. This indicates fierce competition in cloud technologies, artificial intelligence, and even food delivery sectors, where billions of dollars are being invested.
Earlier this week, another Chinese technology company, "Baidu Inc.", raised 4.4 billion yuan ($618 million) through the placement of Dim Sum bonds. In March, it issued 10 billion yuan worth of bonds. "Tencent Holdings Ltd." is considering its first public disclosure of debt obligations in four years and plans to sell offshore bonds this month. "Meituan" is also exploring the placement of Dim Sum bonds.
According to the terms, the funds raised from Alibaba's convertible bonds will be directed towards expanding data processing centers, modernizing technologies, and growing international commercial operations.
""Alibaba pursues a long-term strategy, attracts cheap capital, and prioritizes growth. It will be interesting to see how these investments accelerate revenue growth," said Ravi Wong, First Vice President of "Yan Yun Family Office".
The capital raise indicates a further heating up of the global artificial intelligence race. "TSMC", a partner of "Nvidia", announced a significant increase in sales in August. "Oracle Corp." presented an ambitious forecast for its cloud business. Last week, "Broadcom Inc." shares surged after news of receiving a large order worth over $10 billion from "OpenAI".