Alphabet (GOOGL) has recently increased its equity financing scale for artificial intelligence infrastructure to $84.75 billion, up from the initially announced $80 billion plan, drawing widespread market attention. Following this news, the company’s stock closed at $358.68 on Wednesday, down 0.76%. Investors are concerned on one hand about the dilution effect, while on the other hand closely watching how the new investments in AI and cloud computing can be effectively transformed into growth and returns. Since its listing in 2004, Alphabet’s cumulative stock price increase has reached 14,202%.
On the same day, the S&P 500 fell 0.74% to close at 7,553.68 points, while the Nasdaq Composite Index dropped 0.89% to 26,854 points. In the internet content and information sector, Meta Platforms (META) rose 4.24% to $622.98, whereas Microsoft (MSFT) declined 3.17% to $427.34, highlighting divergent sentiment among major platform peers.
According to the latest disclosure, this financing consists of three major components: a $40 billion “at-the-market offering program” launched from the third quarter onward, with shares to be sold in batches depending on market conditions; an issuance of $18 billion in Class A common stock and Class C capital stock, along with $16.75 billion in depositary shares; additionally, Berkshire Hathaway invested $10 billion in Alphabet through a private transaction. The $84.75 billion scale surpasses the approximately $70 billion record set by Petrobras in 2010, making it the largest equity financing transaction in global capital market history.
Alphabet stated that the proceeds will primarily support growing AI capital expenditures, including building AI data centers, expanding cloud infrastructure, and promoting its self-developed TPU chips. TPUs have become one of the most important AI computing solutions alongside Nvidia’s GPUs. Affected by the news of the financing expansion, Alphabet’s stock price rose about 0.7% at one point during Wednesday’s trading.
In addition to equity financing, Alphabet has also entered the U.S. municipal bond prepaid energy market for the first time, participating in a $1 billion bond transaction issued by the California Community Choice Financing Authority to provide long-term discounted electricity to Pioneer Community Energy, a California power supplier. This marks the first time a U.S. technology company has been publicly disclosed to participate in such a transaction. This model allows the fund recipient to borrow at tax-exempt bond rates and then invest the funds in higher-yielding taxable assets, thereby earning a spread. However, Jason Appleson, head of municipal bonds at PGIM Fixed Income, noted that the entry of large tech companies into the municipal bond market could bring new risks. If more and more giant tech companies use this market for financing, it might eventually exceed the carrying capacity of the municipal bond market itself. The bond is expected to receive a Moody’s rating of Aa2.
