Alibaba to Raise $3.2B via Convertible Bond to Boost Cloud Business

Alibaba Group (HK:9988) announced plans to raise approximately $3.2 billion through a zero-coupon convertible bond offering, with the majority of funds directed toward strengthening its cloud infrastructure. The senior notes, due in 2032, will be issued to non-U.S. investors, according to the company’s statement.

About 80% of the proceeds will be allocated to expanding data centers and upgrading technology to meet rising global demand for cloud services. The remaining 20% will support the company’s growing international commerce operations. This move highlights Alibaba’s commitment to positioning its cloud division as a key driver of long-term growth.

A Reuters report, citing a term sheet, revealed that the bonds will carry a conversion premium of 27.5% to 32.5% above Alibaba’s U.S.-listed share price. The notes are set to mature on September 15, 2032, and can be converted into U.S. shares.

The announcement provided a lift to Alibaba’s Hong Kong-listed shares, which rose 1.3% as of 05:24 GMT on Thursday. The dual-listed Chinese tech giant, which also trades in New York, has been aggressively investing in its cloud unit amid intensifying competition in the sector.

Cloud computing remains one of Alibaba’s strategic priorities, as the company seeks to diversify beyond its core e-commerce business. By raising capital through a convertible bond issuance, Alibaba secures funding at favorable terms while signaling confidence in future growth prospects.

With increasing demand for digital services, the company’s latest funding initiative reinforces its focus on cloud expansion, infrastructure upgrades, and global market reach. The move underlines Alibaba’s broader strategy to stay competitive in both technology and international commerce.