{"text":[[{"start":12.85,"text":"Google has increased the size of its record equity raising to almost $85bn, about $5bn more than targeted, in a sign that investors remain unperturbed by the tech giant’s gargantuan AI infrastructure spending plans."}],[{"start":26.15,"text":"Gross proceeds from the sale of new class A and class C common stock, as well as a $10bn private placement to Berkshire Hathaway, were expected to total $84.75bn, Google’s parent company Alphabet said in a filing on Wednesday. Earlier this week, it said it expected to raise up to $80bn."}],[{"start":47.3,"text":"After strong demand from more than 75 investors, including large mutual funds and sovereign wealth funds, Google decided to increase the size of an offering of common and convertible share sales to $35bn from $30bn and bring in more of the long-term investors, people familiar with the matter said."}],[{"start":66.6,"text":"Goldman Sachs, JPMorgan Chase and Morgan Stanley underwrote the deal. A further $40bnwill be sold directly into the market over time starting in the third quarter."}],[{"start":79.5,"text":"The sale is Alphabet’s first stock offering in more than two decades and will be the largest on record, surpassing Petrobras’s $70bn stock sale in 2010. The success of the deal has stoked speculation that its Big Tech rivals will follow suit."}],[{"start":94.7,"text":"The search giant is taking advantage of a more than doubling of its share price over the past year and sovereign-like credit rating to diversify its funding sources."}],[{"start":103.8,"text":"Silicon Valley’s four “hyperscalers” — Alphabet, Amazon, Meta and Microsoft — expect to spend a collective $725bn on AI this year. While initially they were able to fund those investments with the vast amounts of money their core businesses generate, the bills have begun to strain their finances."}],[{"start":124.05,"text":"Executives had faced questions from shareholders and analysts about the proportion of cash flows being swallowed by spending on data centres and chips to power their AI research and products, which initially generated comparatively little revenue in return."}],[{"start":138,"text":"However, as AI-related earnings start to grow it makes sense for Alphabet’s peers to follow it in raising a mix of more debt and equity to offset spending, according to Heath Terry, head of AI research at Citi."}],[{"start":152.35,"text":"“The first step was to stop doing buybacks, the second step is to issue equity,” he said, noting that scarcity of computing power was pushing up pricing. “Demand is far outstripping supply.”"}],[{"start":165.7,"text":"Google plans $190bn of capital expenditure this year on AI, with that figure expected to “significantly” increase in 2027. That means spending will soon outstrip operating cash flow, which totalled $174bn over the past year."}],[{"start":182.14999999999998,"text":"To address these concerns, Google has also raised $85bn of new debt at cheap rates to cushion its balance sheet, raising its total debt to $100bn."}],[{"start":192.24999999999997,"text":"In addition to the new sources of finance, investors have been comforted by early indications that Google’s AI products are starting to generate meaningful revenues from consumer chatbot subscriptions and sales to larger companies."}],[{"start":207.29999999999998,"text":"Demand for AI has also boosted Google’s cloud division. It reported a revenue jump of 63 per cent year on year to $20bn in the first quarter and claimed a $460bn backlog of contracts to rent data centre space."}],[{"start":222.45,"text":"John Blackledge, analyst at TD Cowen, said: “The main takeaway is that while AI-related capex needs have proven to be historic, and often revised upwards, the same is true of Google’s unprecedented Cloud demand.”"}],[{"start":235.1,"text":"The private placement with Berkshire will lift the investment group’s holdings of Alphabet to about $32bn, accounting for about a tenth of its stock portfolio. The stock issuance is one of the largest that Berkshire has taken part in."}],[{"start":248.4,"text":"It will also make Alphabet one of Berkshire’s five largest publicly traded stock holdings, alongside its long-held stake in Coca-Cola, which is worth more than $31bn."}],[{"start":259.6,"text":"The share sale “represents a strategic proactive move to optimise our financial flexibility”, said Anat Ashkenazi, Alphabet’s chief financial officer. “Global funding access and deep financial flexibility [is] a strategic component of our long-term strategy, particularly given the scale and capital intensity of the current opportunity.”"}],[{"start":290.1,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1780557613_6259.mp3"}