From 3h agoIntroduction: Alphabet to raise $80bn for AI spendingGood morning, and welcome to our rolling coverage of business, the financial markets and the world economy.The economics of the AI boom are back in focus today, after Google’s parent company Alphabet said it plans to raise up to $80bn in equity to – in part - fund its vast AI infrastructure investments.The move is one of the largest equity raisings ever, and includes a $10bn share sale to investsment giant Berkshire HathawayAlphabet, whose Gemini AI system has been growing its share of the AI chatbot market, says it will use the money to expand its “world-class AI compute infrastructure to meet its unprecedented customer demand.”The company says:
double quotation markAI is driving an expansionary moment for Alphabet. The company is experiencing strong demand for its AI solutions and services from enterprises and consumers, at levels that are exceeding the company’s available supply. By scaling its investments, the company seeks to expand its foundational infrastructure to support the significant growth opportunity ahead.
But, such a huge fundraising is also a warning to the markets that, for all the many billions of dollars thrown at AI infrastructure, meaningful returns are limited.Jim Reid, market strategist at Deutsche Bank, told clients that Alhabet is reminding investors of the “unprecedented scale of the AI spending boom”, adding:
