Google parent Alphabet announced Monday it plans to raise up to US$80 billion in stock to fund a major expansion of its artificial intelligence infrastructure, with Warren Buffett’s Berkshire Hathaway committing US$10b as part of the deal.
The US$80b ($134b) fundraising comes as Alphabet ramps up investment spending, with capital expenditures expected to reach US$180-$190b in 2026 and set to rise further in 2027.
The move reflects a broader spending race gripping the technology industry.
Amazon, Microsoft, Alphabet and Meta are collectively on track to pour roughly US$700b into artificial intelligence (AI) data centres, chips and computing infrastructure this year as each scrambles to keep pace with soaring demand for AI services.
Google chief executive Sundar Pichai told investors last month that the company is “compute-constrained in the near term”, meaning it cannot build the necessary infrastructure fast enough to meet demand.
Microsoft has issued similar warnings about capacity shortfalls.
To help close that gap, Alphabet said it plans to raise the new funds through a combination of a US$30b public stock offering, a US$10b private sale to Berkshire Hathaway and a further US$40b share sale programme to be launched in the third quarter.
The bulk of the proceeds will go toward expanding its AI infrastructure, with around US$30b of the share sale programme earmarked to cover tax obligations linked to employee share grants.
In the first quarter, the company reported a profit of US$62.6b on revenue of US$110b, beating analyst expectations and surpassing the same period a year earlier by a wide margin.
Shares have risen 18% over the past six months.
The AI investment frenzy is also driving a wave of landmark sharemarket listings.
Elon Musk’s SpaceX is set to launch its initial public offering (IPO) roadshow this week targeting a valuation of around USD$1.75 trillion ($2.95t), while ChatGPT maker OpenAI and Claude developer Anthropic are both expected to go public later this year.
Anthropic, the maker of the Claude chatbot, filed for its IPO on Monday (local time).
Goldman Sachs, JP Morgan and Morgan Stanley are managing the public offering for Alphabet.
– AFP
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