Google embarks on the sale of 80,000 million in shares to pay for the very expensive AI party
Alphabet says it will use the money raised through the sale of shares to expand its AI infrastructure.
The AI race is increasingly competitive and involves multiple companies that, armed with billions of dollars, want to lead this race at all costs. One of those companies is Alphabet. Google’s parent company has announced that it plans to raise $80 billion through the sale of shares to cover investment in AI infrastructure.
The movement, which promises to become one of the largest capital raisings in history, includes the sale of shares valued at $10 billion to the American investment group Berkshire Hathaway, which was led until last year by financial guru Warren Buffett.
Alphabet, whose Gemini AI model has gained considerable market share in recent months, says it will use the money raised through the sale of shares to expand its AI infrastructure and meet the growing demand for this technology from its customers.
«AI is creating an important moment of expansion for Alphabet. We are experiencing strong demand for AI solutions and services from businesses and consumers at levels that exceed our current available offering. By expanding our investment in AI, we seek to strengthen our basic infrastructure to support the important growth opportunity that looms on the horizon,» emphasizes Google’s parent company.
However, the colossal sale of shares that Google will soon embark on is, in the eyes of some, a warning sign (in no way positive) for the markets. And, although AI is currently attracting million-dollar investments, the return on such investments for investors has to date been rather meager.
The AI war is becoming increasingly bloody
Some financial experts have also been struck by the fact that Berkshire Hathaway has been involved in the fundraising carried out by Alphabet, a company that in the past also came to the fore to provide financing to companies lacking liquidity. In the midst of the financial crisis, Berkshire Hathaway poured, for example, $5 billion into the coffers of Goldman Sachs.
The relationship between Berkshire Hathaway and Google’s parent company is not new in any case and Warren Buffett’s company has been injecting money into Alphabet since last summer.
Alphabet says it will allocate the $80 billion from the share sale to «expand its AI and cloud computing infrastructure.» 10,000 million of those 80,000 million dollars will come from Berkshire Hathaway, another 30,000 million will come from public offers and the remaining 40,000 million will derive from a public offering program of class A and C securities that the company plans to start during the third quarter of the year.
Although the $80 billion with which Alphabet plans to soon fatten its coffers represents just 2% of the company’s $4.6 trillion market capitalization, everything indicates that «Big Tech» will not enjoy as much liquidity in the future as it has had to date, according to experts.
Alphabet had previously reported that in 2026 its capital spending would likely range between $180 billion and $190 billion.
Although Google’s parent company is currently at the forefront of AI, it must also constantly prove to investors that the monumental spending linked to this technology does indeed translate into sustainable revenue growth and not merely larger data centers.
The capital increase by Alphabet occurs at a key moment in which rivals that also operate in the area of AI such as OpenAI, Anthropic and SpaceX are preparing to disembark on the stock markets soon.
Source: www.marketingdirecto.com
