(June 3): Google parent Alphabet Inc upsized its equity raise to US$84.75 billion ($108.73 billion) from the US$80 billion it announced just two days earlier in a bid to help fund growing artificial intelligence (AI) spending plans.
The offering includes a US$40 billion so-called at-the-market programme, which would involve the company selling shares directly into the open market from time to time beginning in the third quarter, as well as a US$10 billion deal with Berkshire Hathaway Inc. The remaining portion of the offering includes US$18 billion in Class A common stock and Class C capital shares and US$16.75 billion in depositary shares.
The equity offering is set to be the largest of all time, according to data compiled by Bloomberg. It is generally rare for a company as large as Alphabet to raise this much equity, and the deal is an unexpected twist in a big year for initial public offerings, especially ahead of SpaceX’s pending public listing.
Alphabet was already set to pull off the biggest equity capital markets transaction of all time at the previous US$80 billion level. Its offerings are poised to top Brazilian oil producer Petroleo Brasileiro SA’s roughly US$70 billion sale of common and preferred stock in 2010.
Google is trying to capitalise on a growing appetite for its home-grown AI chips, known as tensor processing units, or TPUs. They have become a key alternative to Nvidia Corp’s market-leading processors in an industry that requires tremendous amounts of computing power.
The race to build AI data centres to fully utilise the technology has led Alphabet and its megacap peers to boost capital expenditures to record levels. Alphabet shares were about 0.7% higher at 10am in New York City on Wednesday.
See also: Meta sells AI agent for businesses in push to monetise service
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