Warren Buffett's Successor Bets £7.4B on Google: Berkshire Supports Alphabet's £59B AI Fund

Alphabet announced on 1 June that it plans to raise £59.5 billion ($80 billion) through a series of equity offerings to fund its artificial intelligence infrastructure, with Berkshire Hathaway committing £7.4 billion ($10 billion) as the anchor investor through a private placement.

The transaction is one of the largest equity deals in corporate history, according to Bloomberg — and the most significant technology investment yet under Greg Abel, who took over as Berkshire's chief executive on 1 January after Warren Buffett stepped down.

Shares in Alphabet closed at £276.95 ($372.58) on Monday, down 1.02%, and slipped a further 1.5% in after-hours trading.

How the £59B Raise Breaks Down

Berkshire's £7.4 billion placement is split between £3.7 billion ($5 billion) in Class A common stock priced at £261.49 ($351.81) per share, and £3.7 billion ($5 billion) in Class C capital stock at £258.81 ($348.20). Both prices sit below Monday's close.

Alphabet will also launch £22.3 billion ($30 billion) in underwritten public offerings — half in depositary shares tied to mandatory convertible preferred stock, the remainder in Class A and Class C shares. A separate £29.7 billion ($40 billion) at-the-market programme is expected to begin in the third quarter. Goldman Sachs, JPMorgan, and Morgan Stanley are acting as joint book-running managers.

The equity raise follows more than £63.2 billion ($85 billion) in debt Alphabet has issued across six currencies over the past year, according to its SEC filing, pushing total debt above £74.3 billion ($100 billion). The company generated £129.4 billion ($174 billion) in operating cash flow over the 12 months to 31 March.

Abel's Growing Bet on Alphabet

The private placement builds on a rapid accumulation. Berkshire first disclosed an Alphabet stake worth roughly £3.2 billion ($4.3 billion) in the third quarter of 2025. By 31 March this year, the holding had grown to approximately 58 million shares — valued at £12.3 billion ($16.6 billion) at the end of the first quarter. That represents a 224% increase in a single quarter, according to Fortune.

Abel exited 16 stock positions in the first quarter, including Visa, Mastercard, and UnitedHealth, while Berkshire's cash pile climbed to a record £295.5 billion ($397.4 billion).

Steven Check, president and chief investment officer of Check Capital Management, told Reuters that 'all companies are thrilled when Berkshire takes positions, because it is the kind of shareholder that companies like to have.'

Bill Stone, chief investment officer at Glenview Trust Company, said the deal 'underscores that Greg Abel believes that Alphabet will earn a reasonable return on its AI capex spending even with the firm issuing additional shares.'

Why Alphabet Needs the Capital Now

Alphabet raised its 2026 capital expenditure forecast in April to between £133.8 billion and £141.3 billion ($180 billion to $190 billion), roughly double the £67.9 billion ($91.4 billion) it spent in 2025. The company expects that figure to increase significantly in 2027.

Google Cloud generated £14.9 billion ($20 billion) in first-quarter revenue, a 63% year-on-year jump, with its contract backlog nearly doubling to over £342 billion ($460 billion). Total first-quarter revenue rose 22% to £81.7 billion ($109.9 billion), Alphabet's fastest pace in more than two years. Google Search alone contributed £44.9 billion ($60.4 billion), up 19%.

'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,' Alphabet said.

Against a market capitalisation of approximately £3.3 trillion ($4.5 trillion), the total equity issuance implies dilution of around 1.8%. Alphabet's stock has more than doubled over the past year, outperforming all of its megacap peers.