Alibaba Shares Surge on AI Chip Deal and Raises $3.2 Billion in Bond Offering

Lead: Alibaba Group Holding’s U.S.-listed shares jumped over 2% in premarket trading and Hong Kong shares gained more than 5% on September 17, 2025, after landing China Unicom as a major customer for its AI chips and completing a US$3.2 billion convertible bond offering.

Nut Graf: The dual announcements underscore Alibaba’s push to monetize its in-house semiconductor capabilities and strengthen its balance sheet for further AI and cloud investments. This development signals rising confidence in China’s domestic AI infrastructure amid geopolitical technology tensions.

Major AI Customer Win

  • China Unicom Deal: State media CCTV reported that China Unicom will deploy Alibaba’s Pingtouge (“T-Head”) AI accelerators in a new data center, marking a significant commercial endorsement for Alibaba’s semiconductor arm.
  • Stock Reaction:
    • U.S. shares up 2% in premarket trading.
    • Hong Kong shares closed more than 5% higher.

Strengthening Financial Position

  • Convertible Bond Offering: Alibaba announced completion of a US$3.2 billion zero-coupon convertible senior notes issuance, bolstering liquidity to fund AI and cloud infrastructure expansion.
  • Strategic Investments: Proceeds are earmarked for data center build-out and AI research, aligning with the company’s goal to lead China’s domestic AI technology sector.

Market and Strategic Implications

Alibaba’s AI chip business complements its core cloud services, offering customers integrated hardware and software solutions. Securing China Unicom-a top-tier telecom operator-validates Alibaba’s chip performance and could pave the way for further enterprise adoption. The bond offering at favorable terms reflects investor appetite for Alibaba’s long-term growth narrative, even as global economic uncertainties persist.

Overall, today’s events reinforce Alibaba’s transformation from pure e-commerce into an AI-driven technology conglomerate poised to capitalize on surging demand for domestic semiconductor and cloud infrastructure.