Alphabet announced an $80 billion stock raise on Monday to build out artificial intelligence infrastructure. Berkshire Hathaway invests $10 billion through a private placement. This deal is the largest single capital increase in the history of American companies.
The $10 billion private placement is split into a $5 billion offering, with the proceeds allocated to Class A common stock at $351.81 per share. The other $5 billion goes to Series C capital stock at $348.20. The price of both stocks is below Monday’s closing marks.
Berkshire is doubling down on Alphabet, Google’s parent company
Berkshire’s position has been built into Alphabet since last year. The group first bought shares in the third quarter of 2025. By March 31, it had raised $16.6 billion. This new $10 billion would push Alphabet into the top five Berkshire common stocks. Apple still leads the pack.
The investment is one of new CEO Greg Appel’s first big moves since taking over from Warren Buffett in January. Berkshire Spent $16.8 billion in two days. Alphabet’s stake came a day after it acquired homebuilder Taylor Morrison Home Corp for $6.8 billion.
“Everyone has been waiting for Greg to do his job, outside of Warren Buffett’s shadow, and we’re seeing that now,” said Steven Cheek, president of Check Capital Management. Reuters. His company manages $2.4 billion, including more than $700 million in Berkshire stock and options.
Where does the other $70 billion come from?
Alphabet plans to raise $30 billion through simultaneous IPOs. Half goes to depositary shares linked to mandatory convertible preferred stock. The other half goes to Class A and Class C shares. Investment banks are backing the bids.
A separate $40 billion go-to-market program is expected to be launched in the third quarter. This gives the company room to sell shares gradually over time.
Alphabet shares fell about 2% in after-hours trading after the announcement.
Demand for artificial intelligence exceeds supply
Alphabet framed the increase as a supply problem. “The company is experiencing strong demand for its AI solutions and services from businesses and consumers, at levels that exceed the company’s available supply.” He said alphabet.
The capital injection comes on top of strong debt financing. Alphabet raised more than $85 billion in debt across six currencies over the past year. Total debt now stands at more than $100 billion. In April, the company raised its annual capital spending forecast by $5 billion to between $180 billion and $190 billion.
Bill Stone, chief investment officer at Glenview Trust, told Reuters that Berkshire’s investment “confirms that Greg Appel believes Alphabet will receive a reasonable return on its capital spending on artificial intelligence even as the company issues additional shares.”
Alphabet stock has rewarded AI believers
Alphabet (NASDAQ: GOOG) stock is up nearly 160% over the past year as investors bought into Google’s artificial intelligence strategy. This covers cloud services, Gemini, and their custom TPU chips.
The main catalyst was earlier this year Anthropic Commitment To spend $200 billion on Google Cloud for 5 gigawatts of computing power. Mizuho estimates that Tensor Processing Unit (TPU) sales alone could add $61 billion to Google Cloud’s pipeline by next year.
This momentum briefly pushed Alphabet past Nvidia in after-hours trading in May. Google’s parent company had a brief stint as the most valuable public company. Its market cap was about $4.8 trillion at the time, versus Nvidia’s $5.2 trillion by Friday’s close.
Investors will track how quickly Alphabet deploys the new capital. They will also monitor whether the $80 billion dilution of new shares affects the stock price.
At a price-to-earnings ratio of about 28 times estimated earnings, above its historical average of less than 21 times, the market is pricing in continued growth for AI revenues. Meanwhile, Berkshire still had $380.2 billion in cash as of March 31. This leaves Apple with significant firepower to strike additional deals.
At the time of writing, Alphabet (NASDAQ: GOOG) stock is down 1.02% despite the positive news. The stock is trading at $372.58 according to Google Finance Data.
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