Alibaba investors who were hoping the Chinese internet company might avoid the artificial-intelligence spending race are set to be disappointed. The company's stock was falling Monday on its plans to raise funds via a share issue.

Alibaba said Sunday it had reached an agreement to place 710 million new shares to investors outside the U.S. at 112.70 Hong Kong dollars ($14.38) each. That will raise about $10.2 billion.

The company's Hong Kong-listed shares dropped 8.5% to HK$112.50. Its American depositary receipts were down 2.2% to $116.75-each ADR represents eight underlying ordinary shares.

It's no surprise the company will use the proceeds to invest in AI capabilities. The company said in its most recent earnings that AI-related product revenue more than doubled for the 12th consecutive quarter, even as its net profit fell 76% from the same period a year earlier and its capital expenditure rose 75%.

Alibaba is one of several Chinese companies releasing AI models priced well below those of American rivals. But that doesn't mean their development is necessarily that much cheaper. China's AI companies have to rely on relatively inefficient domestic hardware due to their limited access to top chips in the face of U.S. sanctions.

Alibaba's fundraise is just more evidence that the global AI race is expensive for everyone participating, no matter where they are based.