Alphabet asks shareholders to foot an $80 billion bill for AI expansion

Fixes story to reflect correct size of Alphabet's equity offering. By Tomi Kilgore and Emily Bary

Berkshire Hathaway is buying Alphabet's stock at a discount as part of a newly announced equity offering

Alphabet says it's "investing in a balanced way" to expand its AI efforts.

Shares of Alphabet slipped in Monday's after-hours trading, after the cloud and internet giant announced an $80 billion equity offering. This sends a message that the company would rather have shareholders fund its ambitious expansion of artificial-intelligence infrastructure than use cash on hand.

The equity raise includes an agreement reached to sell $10 billion worth of stock to Berkshire Hathaway (BRK.B) - half in Class A common shares and half in Class C capital stock - in a private placement. Based on a MarketWatch analysis of the terms of the placement and recent ownership disclosures, that would increase the number of Alphabet shares Berkshire owns by about 49% to about 86.4 million shares, or 1.3% of the total shares outstanding.

Berkshire is getting to buy Alphabet shares at a deep discount. Its price for Class A shares (GOOGL) is $351.81 and its price for Class C shares (GOOG) is $348.20. Both represent a 6.5% discount to Monday's closing levels.

Equity raises tend to hurt stock prices, because increasing the number of shares outstanding effectively reduces the percentage of the company that current shareholders own. Alphabet shares were off about 0.7% in the extended session Monday.

The Google parent company intends to use the funds "to scale AI infrastructure and global compute."

Alphabet said on its last earnings call that it anticipates $180 billion to $190 billion in capital expenditures for the year and for that spending to meaningfully increase in 2027. The company disclosed at the time that it had $126.84 billion in cash, cash equivalents and marketable securities, meaning some form of capital raise would be necessary to reach its capex target.

The company has already raised billion through bond offerings, with maturities as far out as 40 years. In the past year, it has raised more than $85 billion worth of debt, according to Monday's statement. Alphabet also generated $174 billion of operating cash flow in the 12 months that ended on March 31.

Alphabet said in Monday's statement that it is "investing in a balanced way."

-Tomi Kilgore -Emily Bary

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06-02-26 0355ET