News reports that Meta Platforms Inc is considering issuance of fresh equity to fund development of artificial intelligence once again raises the profile of a tactic used by Google LLC. Alphabet, Google’s parent, has initiated a series of equity-raising exercises totalling at least US$85 billion, and potentially almost $90 billion, over the coming months.
The money is definitely needed. According to PitchBook, combined AI infrastructure spending by Google, Microsoft, Amazon and Meta should hit around $600 billion this year. But all this is premised on the technology paying off commensurate to the huge spending. Meta is estimated to be spending up to $145 billion on AI-related capital expenditure in 2026 alone.
Alphabet’s decision came ahead of SpaceX’s initial public offering, thus soaking up some equity investor appetite ahead of the curve. It also follows the company’s extensive tapping of debt markets to fund capex. Since April 2025, Alphabet has increased its total debt by almost ten times, raising some $90 billion from bond offerings.
The pivot to equity may indicate that bond markets have tapped out on the volume of investment required to fund AI.
At an investor presentation on the equity issuance, Sundar Pichai, chief executive officer of Google and Alphabet, said the company plans to fund investments “in a balanced way”, including through strong operating cash flow, debt issuances and equity offerings.
Berkshire Hathaway’s $10 billion private placement, a lynchpin of the fundraise, apparently does not indicate any wholesale commitment to the new investment fad. Greg Abel, the new chief executive of Berkshire Hathaway, has gone on record saying that the famous firm’s investment in AI will be additive and measured rather than gung ho.
Other institutional investors would probably be wise to take the same approach. AI’s future potential is likely already very well priced in by the sky-high valuations of its leading players. After all, intensive capex without clear proportionate returns further down the line is the very definition of a risky corporate bet.
Markets seem to be careful about the trend. Meta’s stock fell some 7% following the reports that it was considering an equity fundraise. Wall Street regards Alphabet’s existing cloud business as having strong synergy with its AI build-out, while not extending the same positive view to Meta.
Pichai described AI as “the most profound platform shift of our lifetimes”. However true, similar claims in the dotcom era were followed by the dotcom bust. The Nasdaq Composite’s fall in October 2002 wiped out all of its gains during the dotcom bubble. Caveat investor.
