Alphabet plans $80bn raise to fund AI build-out

(Sharecast News) - Alphabet plans to raise $80bn through one of the largest equity offerings on record, it was reported early on Tuesday, as Google's parent company looked to fund a major expansion of its artificial intelligence infrastructure and computing capacity.

The company said the capital would be used to expand its "world-class AI compute infrastructure" to meet unprecedented demand from enterprise and consumer customers. Alphabet said AI demand was exceeding available supply, adding that "by scaling its investments, the company seeks to expand its foundational infrastructure to support the significant growth opportunity ahead."

The fundraising would include a $10bn private placement with Berkshire Hathaway, $30bn of underwritten offerings and a $40bn at-the-market programme to sell Class A and Class C shares over time from the third quarter.

Reuters reported that Berkshire will buy $5bn of Class A stock at $351.81 per share and $5bn of Class C stock at $348.20 per share, both below Monday's closing prices.

The deal would bring Berkshire in as a major investor at a critical point in Alphabet's AI buildout.

Berkshire had already been increasing its stake in Alphabet since the third quarter of last year, with holdings worth about $16.6bn at the end of March, according to regulatory filings cited by Bloomberg.

The new investment came after Greg Abel succeeded Warren Buffett as Berkshire's chief executive.

Alphabet had been sharply increasing spending on AI as it competed with other hyperscalers and looked to capitalise on demand for its in-house Tensor processing units, or TPUs, which had emerged as a major alternative to Nvidia's graphics processors.

In April, the company raised its 2026 capital expenditure forecast to between $180bn and $190bn, and chief financial officer Anat Ashkenazi said 2027 spending would be "significantly" higher.

Alphabet's move also highlighted the broader scale of the AI infrastructure boom.

CNBC said Alphabet, Microsoft, Meta and Amazon were expected to spend more than $700bn combined on capital expenditure this year, while Wall Street analysts estimate total AI-related capex could exceed $1tn in 2027.

The fundraising followed a series of large debt deals by Alphabet, which Reuters said had raised more than $85bn across six currencies and markets over the past year, taking its total debt balance above $100bn.

The company held a global bond sale of more than $30bn in February, after raising $25bn in November.

Alphabet shares slipped in after-hours trading following the announcement, despite having more than doubled over the past year.

The company is now the world's second-most valuable listed company behind Nvidia.

Goldman Sachs, JPMorgan and Morgan Stanley were leading the underwritten offerings, while Goldman was acting as placement agent for the Berkshire private placement.

At 0405 EDT (0905 BST), shares in Alphabet were down 1.87% in premarket trading in New York at $365.62.

Reporting by Josh White for Sharecast.com.