Google parent company Alphabet announced Monday that it plans to raise $80 billion through an equity offering, all of which will be used to invest in AI computing infrastructure to meet unprecedented customer demand that has “exceeded the company’s current supply capacity.” The fundraising is divided into three parts: Berkshire Hathaway subscribed for $10 billion through a private placement; an underwritten offering of $30 billion (including $15 billion in depositary shares representing mandatory convertible preferred stock); and the remaining $40 billion will be raised through at-the-market offerings of Class A and Class C shares, expected to start in the third quarter. Goldman Sachs, JPMorgan Chase, and Morgan Stanley are joint bookrunners, with Goldman Sachs also acting as private placement agent. After the announcement, Alphabet’s stock fell about 2% in after-hours trading.
This fundraising is a continuation of Alphabet’s ongoing push to increase AI spending in order to keep pace with hyperscale cloud providers — in April, the company raised its 2026 capital expenditure forecast to between $180 billion and $190 billion. CEO Sundar Pichai said at the time that management’s biggest concern was “computing power,” with the core bottleneck being how to rapidly scale up electricity, land, and supply chain capacity. Berkshire has been increasing its holdings in Alphabet since the third quarter of last year, and its position was worth about $20 billion before the announcement, making it one of Berkshire’s most important holdings (its largest single holding remains Apple). This $10 billion subscription represents Buffett’s company’s largest single follow-on investment in AI infrastructure to date. Analysts expect the combined capital expenditures of Alphabet, Microsoft, Meta, and Amazon — the four major tech giants — to exceed $700 billion this year, with Wall Street institutions predicting that global AI-related capital expenditure will surpass $1 trillion as early as 2027.