Key facts
- Alphabet announced an $80 billion equity raise.
- The raise includes a $10 billion private placement to Berkshire Hathaway.
- Alphabet shares fell 2.9% following the announcement.
- The equity raise is seen as an escalation in AI investment.
- Concerns are raised about the sustainability of AI spending.
Alphabet's shares fell 2.9% after announcing an $80 billion equity raise, which includes a $10 billion private placement to Berkshire Hathaway. This move, part of a larger strategy to fund AI investments, signals a shift from prioritizing free cash flow to utilizing equity, following previous debt issuances. The raise comprises approximately $30 billion in public offerings and up to $40 billion via an at-the-market program by mid-2026. The decision has sparked debate regarding the valuation and sustainability of AI spending, with some critics pointing to potential market bubbles and waste in the sector. Baird's Ted Mortonson discusses the offering and the AI infrastructure buildout. Goldman Sachs is acting as a joint book-running manager for Alphabet's underwritten offerings.