Google's AI race gets costlier as Alphabet upsizes equity raise to $84.75 billion

Google parent Alphabet has increased its planned equity raise to approximately $84.75 billion, up from the $80 billion it had announced just a couple of days ago. Notably, the tech giant is looking for a capital infusion in order to meet the massive infrastructure demands of artificial intelligence.

According to a Reuters report citing a 2 June filing, Alphabet now plans to raise $18 billion through the sale of Class A and Class C shares and a further $16.75 billion through depositary shares. Alphabet had previously planned to raise $30 billion through concurrent public offerings backed by investment banks, split evenly between the two categories.

Alphabet confirmed in its investor note that the company has also received $10 billion in investment from Berkshire Hathaway and an additional $40 billion through an at-the-market offering programme in the third quarter of the year.

Alphabet's historic equity raise:

The expanded offering from Alphabet is also set to make history. Even at the previously announced $80 billion level, Alphabet was on track to complete the largest equity capital markets transaction ever recorded, according to Bloomberg data. The fundraising would reportedly surpass the roughly $70 billion stock sale completed by Brazilian oil giant Petrobras in 2010, which currently holds the record for the world's largest equity offering.

In an investor presentation published by the company, Alphabet CEO Sundar Pichai said demand for the company's AI solutions from both enterprises and consumers is now "meaningfully exceeding" available supply.

"We are experiencing strong demand for our AI solutions and services from enterprises and consumers, at levels that are meaningfully exceeding our available supply," Pichai said.

The company currently operates more than 30 data centres and over 40 cloud regions worldwide, connected through 10 million kilometres of terrestrial and subsea fibre networks.

Talking about the increased demand for AI systems, Alphabet said it processed just 9.7 trillion tokens per month two years ago. Today, that figure has climbed to 3.2 quadrillion tokens monthly, representing more than a 300-fold increase.

The fundraising comes as Alphabet ramps up spending to meet soaring demand for AI infrastructure. The company raised its 2026 capital expenditure forecast by $5 billion in April and now expects to spend between $180 billion and $190 billion this year, with most of the money going towards data centres, networking equipment, and AI computing infrastructure, Reuters reported.

As companies rush to build the infrastructure needed for training and running powerful AI models, the report notes that major technology companies are expected to have a combined capital expenditure of over $700 billion in 2026, up from earlier projections of around $600 billion.

Pichai, in a post on X (formerly Twitter), thanked investors for backing the company's AI strategy.

"On Monday we announced an equity offering for Alphabet – part of our multi-year investment strategy to meet the AI opportunity ahead and support the demand we're seeing from enterprises and consumers," Pichai wrote. "Pleased to share the offering was well over-subscribed," he added.