Chinese video-streaming platform Bilibili plans to raise $700 million through an offering of convertible senior notes as it seeks to fund share repurchases while increasing investment in artificial intelligence.

The Shanghai-based company said the convertible senior notes will be due in 2031.

Tencent, one of China’s largest technology companies, is expected to subscribe for $200 million of the notes as part of the transaction.

Alongside the financing, Bilibili plans to repurchase up to $300 million of its own shares.

That includes approximately $200 million of shares to be repurchased from Tencent through its subsidiaries, according to the company’s exchange filing.

The remaining proceeds from the notes offering are expected to support Bilibili’s artificial intelligence initiatives as well as general corporate purposes.

The company identified content recommendation, content creation and user engagement as key areas where it plans to expand the use of AI.

AI-based recommendation systems have become increasingly important to digital content platforms as companies seek to improve content discovery and keep users engaged for longer periods.

Generative and other AI technologies are also creating new opportunities for content production and platform operations.

Bilibili said it was considering the current market environment as an opportunity to raise capital on attractive terms while financing its share repurchase programme and strengthening its AI capabilities.

The proposed transaction therefore combines two strategic priorities for the company: returning capital through share repurchases and investing in technologies intended to support future platform growth.

Tencent’s participation is also a significant component of the financing, with its planned $200 million subscription representing more than a quarter of the total proposed notes offering.

The financing comes as major internet and entertainment platforms continue to increase spending on artificial intelligence, particularly in areas such as personalised recommendations, automated content tools and user engagement.

For Bilibili, the new capital would provide additional financial flexibility to pursue those investments while simultaneously carrying out its planned share repurchases.