Berkshire backs Alphabet's $80B capital raise to fund AI infrastructure

Alphabet announced an $80 billion equity raise on Monday to build out AI infrastructure. Berkshire Hathaway is putting in $10 billion through a private placement. The deal is the largest single equity capital raise in US corporate history.

The $10 billion private placement splits into a $5 billion offering, with proceeds allocated to Class A common stock priced at $351.81 per share. The other $5 billion goes into Class C capital stock at $348.20. The price of both stocks is below Monday’s closing marks.

Berkshire doubles down on Google’s parent Alphabet

Berkshire’s position in Alphabet has been building since last year. The conglomerate first bought shares in Q3 2025. By March 31, it had piled up $16.6 billion worth. This fresh $10 billion should push Alphabet into Berkshire’s top five common stock holdings. Apple still leads the pack.

The investment is one of new CEO Greg Abel’s first big moves since he took over from Warren Buffett in January. Berkshire deployed $16.8 billion in two days. The Alphabet stake came a day after a $6.8 billion acquisition of homebuilder Taylor Morrison Home Corp.

“Everyone has been waiting for Greg to do his thing, beyond Warren Buffett’s shadow, and we’re now seeing that,” Steven Check, president of Check Capital Management, told Reuters. His firm manages $2.4 billion, including over $700 million in Berkshire stock and options.

Where the other $70 billion comes from?

Alphabet plans to raise $30 billion through concurrent public offerings. Half goes into depositary shares tied to mandatory convertible preferred stock. The other half goes into Class A and C shares. Investment banks are backing the offerings.

A separate $40 billion at-the-market offering program is expected to launch in Q3. That gives the company room to sell shares gradually over time.

Alphabet’s shares dropped about 2% in after-hours trading after the announcement.

AI demand is outstripping supply

Alphabet framed the raise as a supply problem. “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,” said Alphabet.

The capital injection lands on top of aggressive debt financing. Alphabet has raised $85+ billion in debt across six currencies over the past year. Total debt now sits above $100 billion. In April, the company bumped its annual capital spending forecast by $5 billion to between $180 billion and $190 billion.

Bill Stone, chief investment officer at Glenview Trust Company, told Reuters that the Berkshire investment “underscores that Greg Abel believes that Alphabet will earn a reasonable return on its AI capex spending even with the firm issuing additional shares.”

Alphabet’s stock has rewarded AI believers

The Alphabet stock (NASDAQ: GOOG) has climbed ~160% over the past year as investors bought into Google’s pronged AI strategy. That covers cloud services, Gemini, and its custom TPU chips.

A major catalyst earlier this year was Anthropic’s commitment to spend $200 billion on Google Cloud for 5 gigawatts of computing power. Mizuho estimates that Tensor Processing Unit (TPU) sales alone could add $61 billion to Google Cloud’s pipeline by next year.

That momentum briefly pushed Alphabet past Nvidia in after hours trading in May. Google’s parent had a short stint as the most valuable public company. Its market cap sat at ~$4.8 trillion at the time, against Nvidia’s $5.2 trillion by Friday’s close.

Investors will be tracking how quickly Alphabet deploys the new capital. They’ll also watch whether the dilution from $80 billion in new equity weighs on the stock price.

At a P/E ratio of about 28 times estimated earnings, above its historical average under 21 times, the market is pricing in continued AI revenue growth. Berkshire, meanwhile, still holds $380.2 billion in cash as of March 31. That leaves Abel significant firepower for additional deals.

At the time of writing, Alphabet’s stock (NASDAQ: GOOG) is down by 1.02% depite the positive news. The stock trades at $372.58 according to Google Finance data.

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