It’s difficult to avoid the feeling that a horrible financial reckoning is on the way.
All these big tech firms are spending wildly to make sure they are the one on top at the end of it all. But whoever that ends up being there’s going to be one hell of a lot of fallout underneath them.
In addition, Alphabet has reached an agreement to sell $10 billion of stock to Berkshire Hathaway Inc. in a private placement, comprised of $5 billion in Class A Common Stock at a price of $351.81 per share and $5 billion in Class C Capital Stock at a price of $348.20 per share.
This investment by Berkshire Hathaway adds to the position it has built since Q3 2025.
They know Google has a ton of data to train LLMs on.
Recently I have been asking YouTube's new AI about some videos ("when is Steam metrics mentioned in the video?" for example), which means they also index videos. This is an unthinkable amount of data.
I'm actually impressed at how bad Alphabet is with LLMs since they invented the thing as we know AND have all the data to train on, yet OpenAI and Anthropic are eating their pie.
I use anthropic's models daily, and sometimes switch to Gemini. Google is losing the marketing front BADLY, but their AI service is surprisingly great. It's far cheaper than anthropic for one. and for my kind of research it's just better.
I have not tried the Gemini CLI in a few months but when I did it was a shit show.
Google makes it very hard to use their shit and it was full of bugs.
Anthropic's current run is based entirely around Claude Code in this space and the last time I used the gemeini-cli it wouldnt give me access to the latest models and I was paying them for the privilege
I'm quite certain that Google's AI services are likely the most used in the world right now by virtue of having the widest distribution. It's in the search box. It's on your Android phone. Just because they aren't the preferred coding or research agent does not mean they are losing - that's a pretty small slice.
I think Google is a bit sandbagging here knowing they have all the data and likely better models hiding. My theory is it's a bit of not disrupting the stock market direction by exposing whose really the boss. If they can do it cheaper, faster, and better, people start asking questions, especially with upcoming IPO's.
This makes no sense. Google is beholden to its own shareholders, not the markets at large.
In any case, it's well known that devs in Google have liked anthropic/openai models for coding more than gemini, so unless they're hiding their best models from the people within, I think it's just the case that they're behind.
It's more that they know they can eventually clone any successes the other companies have and steal their market share. Their really is no moat. In a more normal environment they would be buyout candidates but that's a bit too far gone at this point, so you just let them run until they are out of gas and Google can benefit from any advances without upfronting the cost.
Even with anthropics record breaking revenue growth I don't see how the pure AI companies can sustain, but the catch-22 is that any obvious pivot proves that. This puts the more traditional tech companies in position to ride the back of the wave until the growth curve tops.
> they know they can eventually clone any successes the other companies have
Google has gone all in on AI. To the point of challenging their own core product. Apple is waiting and seeing. Google is building and distributing, albeit with terrible marketing.
Coding is a pretty small slice of the markets in play. Google's models are driving cars right now. Using coding agents doesn't give much insight into performance in the broader world; I would assume assume Google is performing better in general even if Claude or Codex is currently outperforming for coding.
I don't think they 'index' videos, per se. They just point the model at the video's transcript on demand when you ask a question, I believe. Doesn't change any of your conclusions, though. You're absolutely right, they have an absolute ton of data.
> The ATM program is intended primarily to facilitate, for a period of time, an administrative
change in how Alphabet meets tax obligations associated with employee equity grants. This
approach will mimic a “sell to cover” model: upon vesting of restricted stock units, shares will
still be delivered to employees net of taxes, and the company will use corporate cash to settle
taxes on behalf of employees. The company intends to issue stock for equivalent proceeds
through its ATM program.
This is an interesting change. Essentially just gives more timing control?
Why? There’s $80B of dilution from new shares issued, so to keep share prices constant market cap would have to increase by $80B. Simultaneously, there $80B in additional assets on the balance sheet, so if the company was previously correctly valued at $N market cap it would now be correctly valued at $N+$80B market cap, right? My intuition is that capital raises, just like stock buybacks, should be first-order (“mechanically”) share price neutral.
In practice there's a lot of issues with asymmetric information. The company knows its own operations and financial position better than random traders on Wall Street. It is rational for it to buy back stock when the market value is lower than the true intrinsic value of the company, and to sell stock when the market value is higher than the true intrinsic value of the company. Therefore, traders often treat buybacks as a signal that the company is "cheap" (at least in the company's own view) and pump up the price accordingly, and treat stock issuances as a sign that company management believes that the stock is "expensive" and push it down accordingly. Company management has more inside information than market participants do, but is usually prohibited from trading on it. Stock issuances and stock buybacks are one of the few cases where insider-initiated trading is legal, because the benefits accrue to the company as a whole rather than a few individuals.
Don't forget that the denominator (total number of outstanding shares) will be increased by this as well. So even if the market cap reacted exactly one to one like you're proposing the per share price wouldn't stay constant necessarily.
Ok but GOOG also has a ~$70B per year stock buyback program for that. It's a little goofy to be buying back and issuing $80B of new shares at the same time.
Supply and demand of Google equity. The fundamental value of a share doesn't change, but you now need more investor capacity to hold the equity. So you need to sell to investors who weren't quite willing to pay the previous price.
It's not based on the fundamental value of the stock so maybe you wouldn't consider it "first order," but I think you can still call it "mechanical."
This is true in a "yes but" sense. Typically equities of the mega caps benefitted from debt issuance on the expectation it would accelerate growth. The change to equity value loss is what is interesting: the market no longer sees this as generating growth, at least not like it used to.
The company has less cash in the balance sheet, so its market cap decreases. But there are fewer shares, so the share price is the same.
(This allows hypothetical future growth to disproportionately benefit existing shareholders, but does not intrinsically increase stock price.)
In practice, like another poster pointed out, it signals the company’s belief that its own shares are undervalued, so the market increases its estimation of value.
Sure but people are no longer expecting these kinds of actions to generate equity gains. Before it was expected the growth would outpace the cost of capital, leading to equity appreciation. The directional change is what is interesting.
1. There’s real profit/value expected in pursuing the full automation of the labor market to the extent that the Board will approve large debts to known allies (BH) who only invest in long term infrastructure.
So they are investing in more AI infrastructure with long term capital because they see the payoff in the long term.
2. That also means they aren’t doing market moving plays in public like selling corporate debt because they don’t want to be in the short term froth with a long term bet.
Capital is cheap for Google because they are making a lot of money and they have very little debt.
They are considered a very low risk and can borrow for a long time at low rates. They recently issued a 100 year bond.
They seem to have decided to issue equity rather than borrow more. This is probably so that they can maintain the ability to borrow very cheaply in future if necessary.
These companies have pivoted from being cash generation machines to being data center building companies. It’s a huge bet that might pay off but the market is starting to notice that where there used to be revenue generation there is now infrastructure spend.
Also I don’t think any of these companies has handled big capex programs in the past (maybe AWS a bit since Amazon is building things, but it did so incrementally)
I could have paid cash for my car, but that would have been a bad move. I wouldn’t have had any liquid assets left over for getting me through a rainy day. The interest I paid on the loan was an acceptable price for reducing my overall risk exposure.
Even if Alphabet has $80B sitting in the bank, they could quite reasonably arrive at a comparable decision.
The other thing people do is associate google only with their consumer facing products. Their cloud business is growing like crazy and they have the best Ai chips for running efficiently/economically at scale (TPUs, vertical integration). There's a reason they run everyone's models better than they can themselves on nvidia cards
Very interesting. Often I only perceive the stock market as existing equity changing hands and the stock value of the company not being immediately relevant for its success (it's just third parties trading ownership around, after all), but I rarely heard of cash raises for the company after the initial IPO - of course only because I didn't pay attention and mostly IPOs make the news.
It's insightful to put such documents into Claude and see how they use many different financial mechanisms to raise the money. $15B sold directly to the big banks, $40B sold to the market (but also facilitated by these banks), a direct investment (PIPE) from Berkshire. Pretty cool how financial markets do these things.
It’s difficult to avoid the feeling that a horrible financial reckoning is on the way.
All these big tech firms are spending wildly to make sure they are the one on top at the end of it all. But whoever that ends up being there’s going to be one hell of a lot of fallout underneath them.
Quoting:
In addition, Alphabet has reached an agreement to sell $10 billion of stock to Berkshire Hathaway Inc. in a private placement, comprised of $5 billion in Class A Common Stock at a price of $351.81 per share and $5 billion in Class C Capital Stock at a price of $348.20 per share.
This investment by Berkshire Hathaway adds to the position it has built since Q3 2025.
They know Google has a ton of data to train LLMs on.
Recently I have been asking YouTube's new AI about some videos ("when is Steam metrics mentioned in the video?" for example), which means they also index videos. This is an unthinkable amount of data.
I'm actually impressed at how bad Alphabet is with LLMs since they invented the thing as we know AND have all the data to train on, yet OpenAI and Anthropic are eating their pie.
I use anthropic's models daily, and sometimes switch to Gemini. Google is losing the marketing front BADLY, but their AI service is surprisingly great. It's far cheaper than anthropic for one. and for my kind of research it's just better.
I have not tried the Gemini CLI in a few months but when I did it was a shit show.
Google makes it very hard to use their shit and it was full of bugs.
Anthropic's current run is based entirely around Claude Code in this space and the last time I used the gemeini-cli it wouldnt give me access to the latest models and I was paying them for the privilege
Google trashed the Gemini CLI client and replaced it with agy (antigravity), which is written in go and is much nicer.
I'm quite certain that Google's AI services are likely the most used in the world right now by virtue of having the widest distribution. It's in the search box. It's on your Android phone. Just because they aren't the preferred coding or research agent does not mean they are losing - that's a pretty small slice.
I think Google is a bit sandbagging here knowing they have all the data and likely better models hiding. My theory is it's a bit of not disrupting the stock market direction by exposing whose really the boss. If they can do it cheaper, faster, and better, people start asking questions, especially with upcoming IPO's.
This makes no sense. Google is beholden to its own shareholders, not the markets at large.
In any case, it's well known that devs in Google have liked anthropic/openai models for coding more than gemini, so unless they're hiding their best models from the people within, I think it's just the case that they're behind.
It's more that they know they can eventually clone any successes the other companies have and steal their market share. Their really is no moat. In a more normal environment they would be buyout candidates but that's a bit too far gone at this point, so you just let them run until they are out of gas and Google can benefit from any advances without upfronting the cost.
Even with anthropics record breaking revenue growth I don't see how the pure AI companies can sustain, but the catch-22 is that any obvious pivot proves that. This puts the more traditional tech companies in position to ride the back of the wave until the growth curve tops.
> they know they can eventually clone any successes the other companies have
Google has gone all in on AI. To the point of challenging their own core product. Apple is waiting and seeing. Google is building and distributing, albeit with terrible marketing.
Coding is a pretty small slice of the markets in play. Google's models are driving cars right now. Using coding agents doesn't give much insight into performance in the broader world; I would assume assume Google is performing better in general even if Claude or Codex is currently outperforming for coding.
who cares about marketing when you have distribution? Probably a smart move to pump dollars into the product and not the marketing.
Is it? My mom and all her friends use "the intelligence". What is it? Gemini, because it's on their android phone.
I've also asked the youtube ai about when some things are mentioned in videos, and upon verification the ai is just hallucinating.
I don't think they 'index' videos, per se. They just point the model at the video's transcript on demand when you ask a question, I believe. Doesn't change any of your conclusions, though. You're absolutely right, they have an absolute ton of data.
Not only that, but the same webmasters who try to shoo AI crawlers away actively court Google's bots.
Really? Every business owner I know outside of HN wants to be discoverable by LLMs.
Being discoverable is one thing, having your content stolen wholesale is another
And having your content rendered inaccessible to humans by a DDoS attack from overly aggressive webcrawlers that ignore robots.txt is yet another.
Everyone mocked them for paying for YouTube for years with no real income. Now it’s the most valuable data source in the world.
It's genuinely interesting to see Google fund this with equity versus debt.
> The ATM program is intended primarily to facilitate, for a period of time, an administrative change in how Alphabet meets tax obligations associated with employee equity grants. This approach will mimic a “sell to cover” model: upon vesting of restricted stock units, shares will still be delivered to employees net of taxes, and the company will use corporate cash to settle taxes on behalf of employees. The company intends to issue stock for equivalent proceeds through its ATM program.
This is an interesting change. Essentially just gives more timing control?
Link to the FWP (Free Writing Prospectus): https://www.sec.gov/Archives/edgar/data/1652044/000119312526...
Interesting timing with the Spacex/Anthropic/OpenAI ipos coming up
Interesting how the market has reacted to this news (down 1.7% after hours)
Well, I mean, you'd expect this move to mechanically push share prices down.
Why? There’s $80B of dilution from new shares issued, so to keep share prices constant market cap would have to increase by $80B. Simultaneously, there $80B in additional assets on the balance sheet, so if the company was previously correctly valued at $N market cap it would now be correctly valued at $N+$80B market cap, right? My intuition is that capital raises, just like stock buybacks, should be first-order (“mechanically”) share price neutral.
First-order, yes.
In practice there's a lot of issues with asymmetric information. The company knows its own operations and financial position better than random traders on Wall Street. It is rational for it to buy back stock when the market value is lower than the true intrinsic value of the company, and to sell stock when the market value is higher than the true intrinsic value of the company. Therefore, traders often treat buybacks as a signal that the company is "cheap" (at least in the company's own view) and pump up the price accordingly, and treat stock issuances as a sign that company management believes that the stock is "expensive" and push it down accordingly. Company management has more inside information than market participants do, but is usually prohibited from trading on it. Stock issuances and stock buybacks are one of the few cases where insider-initiated trading is legal, because the benefits accrue to the company as a whole rather than a few individuals.
Don't forget that the denominator (total number of outstanding shares) will be increased by this as well. So even if the market cap reacted exactly one to one like you're proposing the per share price wouldn't stay constant necessarily.
That's exactly the point... the total number of outstanding shares increases, as does the capital value. These changes should cancel out.
Ok but GOOG also has a ~$70B per year stock buyback program for that. It's a little goofy to be buying back and issuing $80B of new shares at the same time.
Supply and demand of Google equity. The fundamental value of a share doesn't change, but you now need more investor capacity to hold the equity. So you need to sell to investors who weren't quite willing to pay the previous price.
It's not based on the fundamental value of the stock so maybe you wouldn't consider it "first order," but I think you can still call it "mechanical."
This is true in a "yes but" sense. Typically equities of the mega caps benefitted from debt issuance on the expectation it would accelerate growth. The change to equity value loss is what is interesting: the market no longer sees this as generating growth, at least not like it used to.
But stock buybacks shouldn't be price-neutral by default? The entire point is to increase the unit price of the remaining shares.
And in this specific case, selling shares to Berkshire at a 5% discount has a pretty clear signalling effect.
In theory a buyback is price neutral.
The company has less cash in the balance sheet, so its market cap decreases. But there are fewer shares, so the share price is the same.
(This allows hypothetical future growth to disproportionately benefit existing shareholders, but does not intrinsically increase stock price.)
In practice, like another poster pointed out, it signals the company’s belief that its own shares are undervalued, so the market increases its estimation of value.
(intrinsic) value neutral not price.
price is more broad and brings in supply vs demand effects.
In theory a dividend is also price neutral. You have the dividend now but the company you owned doesn't any more.
However, if someone gives you a dividend you typically have to pay tax, and lots of people really hate paying tax.
So buybacks are the preferred price neutral way of dealing with excess cash.
Sure but people are no longer expecting these kinds of actions to generate equity gains. Before it was expected the growth would outpace the cost of capital, leading to equity appreciation. The directional change is what is interesting.
so google had spent too much money to build their own datacenter?
so, at a 8% discount at current prices.
How is Alphabet suddenly short of capital?
You don’t raise money because you’re short on capital. You raise when you’re in a position of power and capital is cheap.
Or if you think that you may not be able to raise this kind of money if the AI story goes down after all these IPOs
Both of these tell the actual market position:
1. There’s real profit/value expected in pursuing the full automation of the labor market to the extent that the Board will approve large debts to known allies (BH) who only invest in long term infrastructure.
So they are investing in more AI infrastructure with long term capital because they see the payoff in the long term.
2. That also means they aren’t doing market moving plays in public like selling corporate debt because they don’t want to be in the short term froth with a long term bet.
They already have shitloads corp debt. They don't want to over leverage.
Agreed! Any public debt is going to be chaotic the next few years most likely
Capital is cheap how? Are you saying they think capital would get more expensive?
Capital is cheap for Google because they are making a lot of money and they have very little debt.
They are considered a very low risk and can borrow for a long time at low rates. They recently issued a 100 year bond.
They seem to have decided to issue equity rather than borrow more. This is probably so that they can maintain the ability to borrow very cheaply in future if necessary.
Latest filing, as of end of March 2026, shows $126.8B in total cash, cash equivalents, and marketable securities:
https://www.sec.gov/ix?doc=/Archives/edgar/data/0001652044/0...
I guess they don't want to burn it down to $40B?
These companies have pivoted from being cash generation machines to being data center building companies. It’s a huge bet that might pay off but the market is starting to notice that where there used to be revenue generation there is now infrastructure spend.
Nobody has the capital to casually invest 200B PER YEAR, in cash, for multiple years.
Literally nobody.
maybe it is wrong to spend 200B every year continuously to begin with.
Also I don’t think any of these companies has handled big capex programs in the past (maybe AWS a bit since Amazon is building things, but it did so incrementally)
Semiconductor/ Big Oil/ Rail/ Telco have.
The market wants to put money into AI.
The market thinks Alphabet is most able to efficiently turn $80B into more money by investing in AI infrastructure.
So, Alphabet is happy to oblige them, given the favorable terms.
More likely Berkshire Hathaway knows that investing into Alphabet isnt just gonna end with -100% of investment when bubble pops.
Are we watching the same AI capex spending choices over the last 1-2 years?
Every company from megacorps to small fish are spending well in excess of profits on these capex expansions. No ROI timelines yet established....
Google has a committed cloud compute backlog of $462b. That's their compute buildout for the next ~2.5 years completely financed.
I could have paid cash for my car, but that would have been a bad move. I wouldn’t have had any liquid assets left over for getting me through a rainy day. The interest I paid on the loan was an acceptable price for reducing my overall risk exposure.
Even if Alphabet has $80B sitting in the bank, they could quite reasonably arrive at a comparable decision.
We will soon see "improved" 'AI Mode' most likely.
Yep, another investment into Duck/Kagi PR push - money well-spent.
They have to do it now. After the probable IPO failures of SpaceX, OpenAI and Anthropic no one will give them money.
It is odd that they cite customer demand just after people leave Google for DuckDuckGo due to AI enshittification.
> After the probable IPO failures of SpaceX, OpenAI and Anthropic no one will give them money.
People are going to line up for all of them. Hype sells these days.
> It is odd that they cite customer demand just after people leave Google for DuckDuckGo due to AI enshittification.
You’ll probably find this is extremely limited to whatever circle you find yourself in
The other thing people do is associate google only with their consumer facing products. Their cloud business is growing like crazy and they have the best Ai chips for running efficiently/economically at scale (TPUs, vertical integration). There's a reason they run everyone's models better than they can themselves on nvidia cards
Very interesting. Often I only perceive the stock market as existing equity changing hands and the stock value of the company not being immediately relevant for its success (it's just third parties trading ownership around, after all), but I rarely heard of cash raises for the company after the initial IPO - of course only because I didn't pay attention and mostly IPOs make the news.
It's insightful to put such documents into Claude and see how they use many different financial mechanisms to raise the money. $15B sold directly to the big banks, $40B sold to the market (but also facilitated by these banks), a direct investment (PIPE) from Berkshire. Pretty cool how financial markets do these things.