Top Stories This Morning: The AI Boom Has Sent Alibaba and Samsung Plummeting; Hugging Face Is Considering a Sale

Alibaba's shares in Hong Kong fell 10% following a $10.2 billion new share offering to finance investments in AI, while Samsung Electronics lost more than 8% due to a plan to return up to $80 billion to shareholders that disappointed investors and a lack of clarity regarding the buyback. AI startup Hugging Face is exploring a potential sale at a valuation of $13 billion. Read about these and other topics in our roundup of key events as of the morning of August 24.

Alibaba’s shares in Hong Kong fell 10% after the company announced a placement of 710 million new shares worth 80 billion Hong Kong dollars ($10.2 billion), according to CNBC. The shares will be offered at 112.7 Hong Kong dollars each—an 8% discount to the closing price on Friday, August 21.

Alibaba will allocate all the funds it has raised toward AI development, including infrastructure expansion. The company is sharply increasing its investment in technology: in the second quarter, capital expenditures rose 75% to 67.7 billion yuan, while profits fell 75%, according to the TV channel.

Samsung Electronics shares in Seoul fell by more than 9% after the company’s plan to return up to 110 trillion won ($80 billion) to shareholders fell short of market expectations, according to Reuters. Investors had been hoping for a more generous distribution of profits from the AI boom and concrete plans for a share buyback.

Samsung plans to return 90–110 trillion won to shareholders this year, but a significant portion of the funds will likely go toward dividends, the agency reports.

The AI startup Hugging Face is exploring the possibility of selling the company at a valuation of $13 billion or more, Business Insider reported. The company has retained a bank to gauge interest from potential buyers.

Hugging Face operates one of the largest platforms for open-source AI models and datasets. In 2023, the startup was valued at $4.5 billion following a funding round involving Salesforce, Google, and Nvidia.

The U.S. Treasury Department will announce a new package of economic measures against Iran on Monday, which Treasury Secretary Scott Bessent has called “Economic D-Day” and the final stage of Washington’s campaign against Tehran, according to CNBC. Countries that continue to conduct financial transactions with Iran may also be subject to the restrictions.

Tehran has threatened to designate as enemies any countries that join the U.S. in imposing economic sanctions, as well as to detain and confiscate ships that violate the rules for transiting the Strait of Hormuz. Iran is also considering imposing a transit fee on ships. Brent crude oil fell 1.3% on Monday morning to $93.22 per barrel.

U.S. authorities are reviewing Shein’s $80 million acquisition of the American retailer Everlane, Bloomberg has learned. The Committee on Foreign Investment in the United States (CFIUS) is reviewing the deal, and Shein itself requested that CFIUS review the transaction after it closed in May. The agency notes that this is an atypical practice: companies typically seek the committee’s approval before the deal is finalized.

The focus is on Shein’s access to Americans’ personal data amid its ties to China. CFIUS may approve the deal, require changes to its terms, or even block the acquisition. The review has become yet another regulatory risk for Shein, which on Monday launched its IPO in Hong Kong with an estimated valuation of up to $27 billion, the agency notes.

— Japan's broad-based Topix index rose 0.3%, while the Nikkei 225 fell 0.4%.

— Hong Kong's Hang Seng Index fell 2%, while mainland China's CSI 300 Index fell 1.5%.

— In South Korea, the KOSPI fell 2.8%, while the KOSDAQ rose 1.5%.

— Australia's S&P/ASX 200 rose 0.5%.

— Nasdaq Composite futures were down 0.4%, S&P 500 futures were down 0.1%, and Dow Jones Industrial Average futures were down less than 0.1%.

This article was AI-translated and verified by a human editor