Alphabet (GOOGL) will raise $80 billion in equity to expand its artificial intelligence infrastructure. Berkshire Hathaway (BRK.B) committed $10 billion to the effort through a private placement. This represents Alphabet’s first large-scale equity offering since 2010.
The company aims to meet surging customer demand for AI solutions that currently exceeds supply. Alphabet will use the funds for capital expenditures to scale global computing power. The investment marks a major capital allocation decision for new Berkshire CEO Greg Abel.
Berkshire will purchase $5 billion in Class A shares and $5 billion in Class C shares at a discount. Alphabet’s total plan includes $30 billion in public stock offerings. The company also established a $40 billion at-the-market program. Alphabet shares declined in after-hours trading following the announcement of potential shareholder dilution.