Alphabet will raise up to $80bn (£59bn) from investors to fund its AI expansion, marking one of the largest equity fundraisings in history and a major shift for a company that has traditionally relied on its vast cash generation to finance growth.

The Google parent said on Monday it would use the proceeds to expand its AI infrastructure and computing capacity as demand for its products continues to outstrip supply.

The package includes a $10bn private share sale to Berkshire Hathaway, the investment group built by Warren Buffett, alongside $30bn in underwritten stock offerings and a further $40bn through a flexible at-the-market share sale programme expected to begin later this year.

Alphabet said the fundraising would support “capital expenditures to scale AI infrastructure and global compute” as it experiences “strong demand for its AI solutions and services from enterprises and consumers, at levels that are exceeding the company’s available supply”.

The move comes as the owner of Google, Gemini and Google Cloud accelerates spending on data centres and computing infrastructure needed to compete with rivals including Microsoft, Amazon, Meta, OpenAI and Anthropic.

Shares fell around one per cent in after-hours trading following the announcement.

Financing the AI boom

The fundraising represents a notable departure for Big Techs, which have historically prided themselves on highly cash-generative business models.

Nicholas Hyett, lead alternatives analyst at Hargreaves Lansdown, said: “These are some of the biggest ever equity raises and represent a major volte-face for the giants of US tech, which used to pride themselves on capital light operating models that spat out cash rather than gobbling it up.”

Alphabet has already guided for capital expenditure of between $180bn and $190bn this year, with spending expected to rise significantly again in 2027.

The company recently reported Google Cloud revenue growth of 63 per cent year-on-year, reflecting surging demand for AI-related services.

Matt Britzman, senior equity analyst at Hargreaves Lansdown, said the raise was “a clear sign that the AI arms race is moving into a more capital-hungry phase”.

“It’s certainly a huge chunk of money to be raising, but the devil’s in the details,” he added. “The full $80bn is less than two per cent of Alphabet’s mammoth $4.6 trillion market cap.”

The announcement comes as AI financing becomes increasingly institutionalised.

Anthropic filed confidentially for a US IPO on Monday, while OpenAI is also expected to pursue a public listing.

Ipek Ozkardeskaya, senior analyst at Swissquote, said: “The AI race is no longer being funded solely by venture capitalists willing to lose money for a decade. The financing is becoming increasingly institutionalised.”

Alphabet’s fundraising, combined with Berkshire Hathaway’s participation, shows how traditional finance is becoming more deeply entwined with the AI boom.

“This means that AI is increasingly becoming a financing story as well,” Ozkardeskaya said. “And the deeper traditional finance gets involved, the more the AI story shifts from a technology narrative toward a financing and credit narrative.”