Alphabet Plans $80 Billion Stock Sale for AI Buildout

Alphabet said Monday it plans to sell $80 billion in stock, including through a $10 billion investment by Berkshire Hathaway. The capital will fund investments in its world-class AI compute infrastructure to meet its unprecedented customer demand.

Strong demand for AI solutions exceeds supply. The company is experiencing strong demand for its AI solutions and services from enterprises and consumers, at levels that are exceeding the company's available supply. By scaling its investments, the company seeks to expand its foundational infrastructure to support the significant growth opportunity ahead. Alphabet said in the filing that this demand is at levels exceeding its available supply.

Capital expenditure forecast raised in April. The announced raise comes as the company spends significantly more this year on AI-related expenses. In April, Alphabet updated its full-year capital expenditure range to between $180 billion and $190 billion. This was revised upward from its previous estimate of $175 billion to $185 billion.

Berkshire Hathaway investment forms part of raise. The $10 billion investment by Berkshire Hathaway is included in the overall $80 billion stock sale. Alphabet said the capital from the full raise will fund investments in its world-class AI compute infrastructure.

Underwritten offerings total $30 billion. In addition to the $10 billion from Berkshire, Alphabet plans $30 billion in underwritten offerings. This includes $15 billion in depositary shares representing mandatory convertible preferred stock. These offerings form a major portion of the planned capital raise.

At-the-market program to begin in third quarter. The remaining $40 billion will come from an at-the-market offering program for Class A and Class C shares. That program is expected to begin in the third quarter. The full stock sale is designed to expand infrastructure for the significant growth opportunity ahead.