so google had spent too much money to build their own datacenter?
Alphabet announces $80B equity capital raise to expand AI infra and compute
51–60 of 247 posts
Re: Alphabet announces $80B equity capital raise to expand AI infra and compute
#52Earlier quoted context omitted.
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…
(intrinsic) value neutral not price.
price is more broad and brings in supply vs demand effects.
Re: Alphabet announces $80B equity capital raise to expand AI infra and compute
#53Earlier quoted context omitted.
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 eatin…
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
Re: Alphabet announces $80B equity capital raise to expand AI infra and compute
#54Re: Alphabet announces $80B equity capital raise to expand AI infra and compute
#55Link to the FWP (Free Writing Prospectus): https://www.sec.gov/Archives/edgar/data/1652044/000119312526...
Re: Alphabet announces $80B equity capital raise to expand AI infra and compute
#56Earlier quoted context omitted.
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 (“mec…
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.
Re: Alphabet announces $80B equity capital raise to expand AI infra and compute
#57Earlier quoted context omitted.
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…
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.
Re: Alphabet announces $80B equity capital raise to expand AI infra and compute
#58Earlier quoted context omitted.
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.
Re: Alphabet announces $80B equity capital raise to expand AI infra and compute
#59Earlier quoted context omitted.
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.
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.
Re: Alphabet announces $80B equity capital raise to expand AI infra and compute
#60How is Alphabet suddenly short of capital?
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.