Big Tech Intensifies AI Infrastructure Race

Stock Drops Nearly 2% Amid Concerns Over Shareholder Value Dilution

Alphabet, Google's parent company, is set to raise a massive $80 billion (approximately 121 trillion won) to expand its artificial intelligence (AI) infrastructure. Concerns over shareholder value dilution have led to a slight decline in the company's stock price.

Sundar Pichai, CEO of Alphabet (Google's parent company). Reuters Yonhap News

Sundar Pichai, CEO of Alphabet (Google's parent company). Reuters Yonhap News

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According to U.S. media outlets Bloomberg and CNBC, Alphabet announced on June 1 (local time) a funding plan totaling $80 billion, which includes a $10 billion investment from Berkshire Hathaway.


The funding plan consists of several components: in addition to Berkshire Hathaway's $10 billion investment, there will be a public offering via acquisition agreement involving investment banks (IBs) totaling $30 billion. Half of this will be structured through depositary shares linked to mandatory convertible preferred stock, while the remaining half will involve the issuance of Class A and Class C shares.


Additionally, Alphabet stated that starting in the third quarter, it will gradually sell up to $40 billion worth of Class A and Class C shares through an ATM (At-the-Market) program, adjusting to market conditions. The ATM program is a type of capital increase in which shares are sold incrementally at prevailing market prices.


Alphabet plans to use the funds raised to expand its AI data centers and computing infrastructure. In its disclosure, Alphabet stated, "There is strong demand for AI solutions and services, exceeding our current supply capacity." The company added, "Through increased investment, we aim to expand the foundational infrastructure that will support large-scale growth opportunities in the future."

Google to Raise $80 Billion for AI Investment with Berkshire Hathaway Participating View original image

This fundraising comes as Alphabet is significantly increasing its AI-related expenditures this year. In April, Alphabet raised its capital expenditure (CAPEX) guidance for this year from the previous range of $175 billion–$185 billion to $180 billion–$190 billion.


Market analysts note that the 'AI infrastructure war' among big tech companies is intensifying amid large-scale AI investment competition involving players such as OpenAI, Anthropic, and SpaceX.



Alphabet's Class C shares fell by 1.63% after market close. During regular trading, the stock ended the day down about 1%.


This content was produced with the assistance of AI translation services.

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