This article first appeared on GuruFocus.
Alphabet (GOOGL, Financials) is moving to raise $80 billion as the Google parent races to fund its growing AI infrastructure needs.
The plan includes a $10 billion private investment from Berkshire Hathaway, giving Alphabet a high-profile backer as it expands spending on cloud services, AI tools and custom chips.
Alphabet said demand for its AI products is running above available supply. That explains the size of the fundraising push.
The company already raised its annual capital spending forecast to $180 billion to $190 billion in April, up $5 billion from its prior outlook.
Berkshire will buy $5 billion of Class A shares and $5 billion of Class C shares at prices below Monday’s close.
For Alphabet, the deal brings in capital at a time when AI infrastructure is becoming more expensive. For investors, Berkshire’s involvement may also be seen as a vote of confidence in Alphabet’s long-term AI strategy.
Still, shares slipped after hours, likely because investors are weighing the impact of more stock issuance.
The real test is whether Alphabet can turn this heavy AI spending into stronger cloud growth, higher revenue and better long-term returns.
