Alphabet announces $80 billion equity fund raise for AI spending
Alphabet is also taking advantage of the stock rally seen over the last 12 months, during which the stock has more than doubled in value, making it the second-most valuable company in the world behind Nvidia.
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Sundar Pichai-led Alphabet Inc. has announced an $80 billion fund raising through equity offerings on Monday, June 1. The deal includes an investment of $10 billion by Berkshire Hathaway.
As per the undertaking issued, Alphabet will raise $40 billion through a so-called "at-the-market" program, by selling shares from time to time, starting the third quarter.
Put together, the transaction represents one of the largest equity deals of all time and comes at a time when some of the largest AI-linked companies are preparing to go public, such as OpenAI and Anthropic.
“AI is driving an expansionary moment for Alphabet,” the company said in the statement. “By scaling its investments, the company seeks to expand its foundational infrastructure to support the significant growth opportunity ahead.”
Google's Tensor Processing Units or TPUs have emerged as a key alternative to Nvidia's processors in an industry that is grappling with plenty of demand but not enough supply.
During its latest quarterly results, Alphabet had announced that their capex for 2027 will be "significantly higher" than the $190 billion it had budgeted for 2026, without giving a specific number.
Analysts tracking the company believe that this spending spree could even exceed the company's operating cash flow. They also said that if the street believes that the capital allocation to Google's TPUs are an attractive bet for them, it could hurt prospects of these mega upcoming IPOs, even if they are fast growing companies.
Alphabet is also taking advantage of the stock rally seen over the last 12 months, during which the stock has more than doubled in value, making it the second-most valuable company in the world behind Nvidia.
Berkshire Hathaway had started building a stake in Alphabet last year. As of March, the firm, run for long by Warren Buffett, held Class A and Class C shares of Alphabet worth nearly $17 billion.
Goldman Sachs Group Inc., JPMorgan Chase & Co. and Morgan Stanley are leading the underwritten offerings, Alphabet said. Goldman Sachs is the agent for the private placement.
Shares of Alphabet were down 1.5% in extended trading after the announcement.
As per the undertaking issued, Alphabet will raise $40 billion through a so-called "at-the-market" program, by selling shares from time to time, starting the third quarter.
The Google-parent will also offer $30 billion in underwritten offering of shares and a mandatory convertible preferred stock. The remaining funds come from Berkshire.
Put together, the transaction represents one of the largest equity deals of all time and comes at a time when some of the largest AI-linked companies are preparing to go public, such as OpenAI and Anthropic.
“AI is driving an expansionary moment for Alphabet,” the company said in the statement. “By scaling its investments, the company seeks to expand its foundational infrastructure to support the significant growth opportunity ahead.”
Google's Tensor Processing Units or TPUs have emerged as a key alternative to Nvidia's processors in an industry that is grappling with plenty of demand but not enough supply.
During its latest quarterly results, Alphabet had announced that their capex for 2027 will be "significantly higher" than the $190 billion it had budgeted for 2026, without giving a specific number.
Analysts tracking the company believe that this spending spree could even exceed the company's operating cash flow. They also said that if the street believes that the capital allocation to Google's TPUs are an attractive bet for them, it could hurt prospects of these mega upcoming IPOs, even if they are fast growing companies.
Alphabet is also taking advantage of the stock rally seen over the last 12 months, during which the stock has more than doubled in value, making it the second-most valuable company in the world behind Nvidia.
Berkshire Hathaway had started building a stake in Alphabet last year. As of March, the firm, run for long by Warren Buffett, held Class A and Class C shares of Alphabet worth nearly $17 billion.
Goldman Sachs Group Inc., JPMorgan Chase & Co. and Morgan Stanley are leading the underwritten offerings, Alphabet said. Goldman Sachs is the agent for the private placement.
Shares of Alphabet were down 1.5% in extended trading after the announcement.
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