Alibaba shares plunged as much as 10% in Hong Kong on Monday after the Chinese tech giant priced an 80 billion Hong Kong dollar ($10.20 billion) placement of newly issued shares to non-U.S. investors. 

The company said it plans to use all of the net proceeds to invest in its full-stack AI capabilities, including expanding and enhancing its AI infrastructure.

Alibaba will issue 710 million new shares at HK$112.70 apiece, compared with the stock’s Friday closing price of HK$123. Shares were last trading 8.4% lower at HK$112.7.

The share placement, expected to close on Wednesday, comes just days after Alibaba reported a 75% drop in profit for the June-quarter as heavy AI spending weighed on its results. Capital expenditure jumped 75% to 67.7 billion yuan.

Vey-Sern Ling, senior equity advisor at UBP, told CNBC last week following Alibaba’s latest earnings that the company was well-positioned to pursue AI growth. 

“I think Alibaba clearly is well positioned to chase that growth, given that they have a cloud computing arm, they have a very strong AI model,” he said, adding that profits might weaken in the near term, while capex might rise.

Alibaba has been ramping up investment in AI as it seeks to make the technology a key driver of future growth.The company last year announced plans to invest at least 380 billion yuan in cloud computing and AI infrastructure over the next three years. 

Alibaba’s Chinese tech peers have also been ramping up AI spending. Tencent’s capital expenditure rose 65% from the previous quarter to 52.8 billion yuan in the June-quarter as the company continued to invest in computing infrastructure to monetize its AI models.