Alibaba is reportedly planning to raise $3.2 billion through the sale of a zero-coupon convertible bond as it looks to ramp up international expansion and strengthen its cloud computing portfolio.

According to a report by Reuters, the Chinese e-commerce giant has stated that it intends to allocate 80 per cent of the proceeds to expanding Alibaba's cloud, with a focus on enhancing its data centre portfolio, upgrading its technology and strengthening its field services.

The remaining 20 per cent will be used to strengthen its market presence in the e-commerce sector.

The bond is set to mature on September 2032 and convert into US-listed shares.

Investors won’t receive interest payments but Alibaba will offer the bond with a 27.5 per cent to 32.5 per cent conversion premium above its US-listed share price, according a document seen by Reuters. Financial markets platform Dealogic says that the vehicle would officially be the largest convertible bond deal of 2025, surpassing DoorDash’s $2.75 billion issuance from May.

Over the past year, Alibaba has increasingly been allocating capital to AI, alongside strengthening and forming new partnerships to boost AI advancements, with the company announcing plans to invest at least $53 billion (RMB 380 billion) in AI over the next three years, its largest investment in the technology to date.

In July, the firm’s cloud arm Alibaba Cloud inked a new AI deal with Standard Chartered.

The partnership will involve developing AI-powered customer service and sales intelligence to improve customer engagement, automating AI-driven risk management and compliance, and upskilling its workforce through AI workshops and certifications.

In April, Alibaba announced the release of its latest generation of open-source large language models, Qwen3, in what the company has described as a significant breakthrough in China's rapidly expanding artificial intelligence landscape.

The Chinese tech giant said that the new Qwen3 series promises improved capabilities in reasoning, instruction following, tool usage and multilingual support across 119 languages and dialects.

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