Alphabet to raise $80bn in equity for AI spending

Alphabet, Google’s parent company, is raising $80 billion through equity offerings to accelerate its AI investments. The plan includes a $40 billion at-the-market share sale starting in the third quarter, $30 billion in underwritten stock and convertible preferred stock, and a $10 billion deal with Berkshire Hathaway. This marks one of the largest equity raises ever by a public company, driven by the high costs of building AI infrastructure and competing with Nvidia’s dominance in AI chips. The funding supports Alphabet’s push into AI, particularly its tensor processing units (TPUs), which rival Nvidia’s processors. The company stated AI is fueling growth, requiring expanded investments in foundational infrastructure. Alphabet’s CFO, Anat Ashkenazi, previously warned 2027 capital expenditures would surpass $190 billion, with estimates now reaching $300 billion, outpacing even its operating cash flow. Analysts suggest this massive funding could divert capital from AI rivals like SpaceX, Anthropic, and OpenAI, which are preparing for IPOs this year. Bloomberg Intelligence’s Mandeep Singh noted limited public market capital may force investors to prioritize Alphabet’s TPUs over new AI startups. Alphabet’s stock has doubled in the past year, making it the world’s second-most-valuable company after Nvidia. Berkshire Hathaway, led by Greg Abel since Warren Buffett’s retirement, is investing $10 billion in Alphabet’s latest equity raise. The firm already held shares worth $16.6 billion as of March. Underwritten offerings are led by Goldman Sachs, JPMorgan Chase, and Morgan Stanley, with pricing set for Tuesday after U.S. market close. The funding reflects Alphabet’s aggressive strategy to dominate AI through hardware and software investments. With rivals also scaling up, the company’s move underscores the intense competition and capital demands of the AI race.