Alphabet Plans $80 Bn Capital Raise as AI Demand Outpaces Supply

Alphabet on June 1 announced plans to raise $80 billion through a combination of public stock offerings and an at-the-market (ATM) share sale programme as the Google parent seeks to expand its AI infrastructure and computing capacity amid rising demand for AI services. 

Berkshire Hathaway has also agreed to invest $10 billion in the company through a private placement.

The capital raise includes $30 billion in underwritten public offerings, consisting of $15 billion in mandatory convertible preferred stock and $15 billion in Class A and Class C shares. 

Alphabet also plans to establish a $40 billion ATM stock sale programme that is expected to begin in the third quarter of 2026. Berkshire Hathaway will purchase $5 billion each of Class A and Class C shares, bringing the conglomerate's total investment in Alphabet higher after it began building a position in the company in 2025.

Alphabet said the proceeds will primarily be used to support capital expenditures related to AI infrastructure and global compute capacity. The company added that about $30 billion of the ATM programme proceeds are expected to be used to meet tax obligations linked to employee equity awards during the 2026 calendar year.

“AI is driving an expansionary moment for Alphabet,” the company said in the announcement. “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.”

Alphabet recently projected capital expenditures of $180 billion to $190 billion in 2026 and said spending would increase further in 2027. The company said the equity offering is part of a broader funding strategy that also includes operating cash flow and debt issuance. 

Over the 12 months ended March 31, Alphabet generated $174 billion in operating cash flow and raised more than $85 billion through debt markets, bringing its total debt balance above $100 billion.

The company pointed to continued growth across its businesses. Revenue rose 22% year over year to $110 billion in the first quarter of 2026, while Google Cloud revenue increased 63%. 

Alphabet said its cloud backlog nearly doubled quarter over quarter to more than $460 billion. The company also reported 350 million paid subscriptions and said more than 8.5 million developers use its AI models each month.

Goldman Sachs, JP Morgan, and Morgan Stanley are serving as joint book-running managers for the underwritten offerings, while Goldman Sachs is acting as placement agent for the Berkshire Hathaway transaction. The proposed offerings remain subject to market conditions and other customary closing requirements.