The Chinese technology group said the proceeds would be used to expand its full-stack AI capabilities, including chips, computing infrastructure and model development, as it seeks to strengthen its position in the global AI market.

Alibaba is offering about 710m shares at a 3.6% discount to its latest closing price. Reuters reported that strong investor demand prompted the company to increase the size of the offering.

The fundraising comes as Alibaba increases spending on AI and cloud infrastructure. The company has previously committed to invest 380bn yuan, or about $56bn, over three years in the sector. It has already spent around half of that amount.

Alibaba reported a 75% year-on-year fall in quarterly net profit for the April-June period, while revenue increased by about 9%. Revenue from its cloud and AI-related services rose 45%, reflecting growing demand for computing and AI products.

The company said the latest share placement is intended to support long-term growth as competition intensifies among Chinese and international technology companies over AI infrastructure, models and services.