00:00 Speaker A
I’m really interested in this um fund raise that Alphabet is going to be doing that it announced yesterday. $80 billion. Um part of that is Berkshire Hathaway investing $10 billion in the company. But what’s so interesting about this, yes, we know they need money. Everybody needs to raise money. What’s interesting to me about this is that they are doing it by raising equity, right? They’re selling more shares onto the market. And I recently talked to um Biki Chada of Deutsche Bank and he said,
00:30 Speaker A
this isn’t an issue now, but could become an issue with these companies needing to raise money. Not only do they need to raise money, but instead of buying back stock, they’re spending it on CapX, right? So it so it’s a supply demand question. How many shares are in the market that are available versus how many people want to buy them? And at some point is is the amount of supply going to be more of an issue?
00:54 Speaker B
Yeah, it it is strange that they would go to the equity market for this. We thought they had plenty of cash on hand. They didn’t mention this last quarter that they were going to go to the equity market. But when you have a preferred investor like Berkshire Hathaway, that makes things easier for both sides, but that’s just 10 billion of the raise here. They’re going to spend $180 to $190 billion dollars in CAPEX this year and even more next year. So
01:19 Speaker A
Significantly more than this. Yeah.
01:20 Speaker B
where’s where’s the money going to come from? Well, there seems to be plenty of appetite in the public markets right now. We finally going to get some new companies in to the public markets. They’re staying private longer. But I think Alphabet looks at this and says, there seems to be a lot of demand for our stock. Even today, one of the best performers really over the last few years. Why not go to the equity market for this?
01:41 Speaker A
Yeah, definitely.
01:42 Speaker C
This was a stock that obviously was suffering as a result of open AI and, you know, everybody thinking that open AI was going to eat its lunch. Uh, you know, I mean, when they originally came out with Microsoft, you know, with their version of Microsoft launched a new version of Bing with, you know, uh GPT built in, it was, you know, like, oh well all hands on deck now is is Google search going to go away and no, obviously, everybody was still using Google Search. Um, but the idea was that they were just a a laggard.
02:22 Speaker C
And then they, you know, Gemini 3 comes out, they start, you know, crushing it. Uh everybody says, oh, oh, that’s right, they are a company that knows AI, even though they’ve been using AI forever. Um and you know, now it’s just kind of this, I would say three horse race almost. Um you could throw meta in there, you know, they’re continuing to improve. But you know, it is interesting to just see how much Google has evolved with kind of Gen AI and now, you know, you don’t use Google search without it most of the time.
