Google parent Alphabet said on Monday it plans to raise $80 billion through a stock offering for its planned large-scale artificial intelligence infrastructure expansion project. The company said in a statement that the financing will be used for "general corporate purposes, including capital expenditures to expand AI infrastructure and global computing power" to meet the current rapidly rising market demand.
As part of the plan, Alphabet will sell $10 billion worth of stock to Berkshire Hathaway, the global holding company long helmed by "stock god" Warren Buffett. Alphabet said that demand for the company's AI solutions and services from enterprises and consumers is "strong and continuing to rise, exceeding the company's current supply levels." By expanding its investment, the company hopes to expand its underlying infrastructure to support significant future growth opportunities.
Alphabet also emphasized that this equity financing arrangement will help maintain the stability of the company's balance sheet while continuing to increase investment, and provide a source of funds for long-term capital expenditures in a relatively "balanced" manner. This means that the company will still accelerate the expansion of cloud infrastructure and computing power networks required in the AI era while maintaining financial security boundaries.
Like other technology giants, Google has announced plans this year to significantly increase investment in computing power and infrastructure to support its intensive launch of a large number of new AI services. At the Google I/O developer conference last month, CEO Pichai said the company expected capital expenditures to be between $180 billion and $190 billion this year in key areas including data centers, chips and networks. Market expectations are that Google and other large technology companies may invest as much as $700 billion in AI-related capital expenditures this year, highlighting the intensity of the industry's competition in AI infrastructure.