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Comment by swiftcoder | Hacker News Reader

How is Alphabet suddenly short of capital?

You don’t raise money because you’re short on capital. You raise when you’re in a position of power and capital is cheap.

Or if you think that you may not be able to raise this kind of money if the AI story goes down after all these IPOs

Both of these tell the actual market position:

1. There’s real profit/value expected in pursuing the full automation of the labor market to the extent that the Board will approve large debts to known allies (BH) who only invest in long term infrastructure.

So they are investing in more AI infrastructure with long term capital because they see the payoff in the long term.

2. That also means they aren’t doing market moving plays in public like selling corporate debt because they don’t want to be in the short term froth with a long term bet.

They already have shitloads corp debt. They don't want to over leverage.

Agreed! Any public debt is going to be chaotic the next few years most likely

No they don't lol. Their debt to equity ratio is 0.19. For reference Berkshire is 0.18 and Microsoft is 0.25

Capital is cheap how? Are you saying they think capital would get more expensive?

Capital is cheap for Google because they are making a lot of money and they have very little debt.

They are considered a very low risk and can borrow for a long time at low rates. They recently issued a 100 year bond.

They seem to have decided to issue equity rather than borrow more. This is probably so that they can maintain the ability to borrow very cheaply in future if necessary.

Sorry I am not buying into that. In your logic they should issue more debt. Their operating margin is lowest compared to Microsoft and meta. If oil goes to 200 tomorrow their profit margin will be squeezed most along with meta. (Ads) Backlog in cloud does not mean shit imo. They can slow roll it. Matter of fact half of that backlog seems backed by anthropic anyway. So imagine anthropic not making money because of a down turn and going down. Who will pay the backlog? This is exactly why they are diluting their stock instead of issuing more debt, they don't want to put all their eggs in one basket and want to retain capital for such downturn. That's how I read it.

They've already issued $80B in 6 markets/currencies. How much more do you think they can raise at a decent rate? I think they might issue more next year.

Issuing new equity might be a financial engineering experiment. No other mag7 has tried it. Plus they got BH name on the plate.

More money for less stock, because Google’s stock has gone up in price. By contrast, a stock buyback makes sense when the stock is cheap.

So I guess Google doesn’t think their stock is particularly cheap, but Berkshire Hathaway wants to buy more anyway. (At a slight discount.)

Latest filing, as of end of March 2026, shows $126.8B in total cash, cash equivalents, and marketable securities:

https://www.sec.gov/ix?doc=/Archives/edgar/data/0001652044/0...

I guess they don't want to burn it down to $40B?

Not all cash is fungible for CapEx. For instance, much of that might hypothetically be held in an offshore account. Building a datacenter with it would trigger unfavorable VAT or sales tax or something... Hypothetically...

High cap companies use debt for this: bank loan is located in the market where it's needed most, and the debt is serviced by interest earned from securities in other markets. The net taxes are a small percent (think 3%) relative to simply transferring funds within the company. Yes, this is the low effective tax rate the EU is quite upset about.

Other reasons for not touching their holdings usually have a similar explanation. The securities are fungible for accounting purposes but not fungible enough for actual day-to-day operations. Result: securities get "stranded" and the large company grows a hedge fund appendage.

Yeah, for profitable companies, debt is a strategic tool not a desperate act. It more about orchestrating around the money that is soft locked somewhere else.

These companies have pivoted from being cash generation machines to being data center building companies. It’s a huge bet that might pay off but the market is starting to notice that where there used to be revenue generation there is now infrastructure spend.

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.

They have $100B on the balance sheet. The best time to raise capital is when you don't need it, and the worst time is when you desperately do.

Nobody has the capital to casually invest 200B PER YEAR, in cash, for multiple years.

Literally nobody.

maybe it is wrong to spend 200B every year continuously to begin with.

Also I don’t think any of these companies has handled big capex programs in the past (maybe AWS a bit since Amazon is building things, but it did so incrementally), aka they don’t have the institutional knowledge to manage the risk associated with it.

Semiconductor/ Big Oil/ Rail/ Telco have.

If you're going to bring up CapEx, Cloud is entirely a CapEx vs OpEx play so AWS and GCP are entirely familiar with the risks there. AWS dates back to 2006 and Google was building data centers long before GCP was public. Smaller, sure, but their finance team understand CapEx and OpEx well.

I don’t think I agree. Cloud has not faced (yet) a serious downturn.

I can invest perfectly in an always up market.

> Cloud has not faced (yet) a serious downturn

2008 wasn't a serious downturn?

GCP didn't launch until 2008, and AWS was only a small cluster of core services before that point. I don't think it fair to say that either platform really had to weather that crisis

Masayoshi Son does a pretty good job of setting about that much cash aflame every year.

Preparing for acquisitions?

Are we watching the same AI capex spending choices over the last 1-2 years?

Every company from megacorps to small fish are spending well in excess of profits on these capex expansions. No ROI timelines yet established....

Google has a committed cloud compute backlog of $462b. That's their compute buildout for the next ~2.5 years completely financed.

I could have paid cash for my car, but that would have been a bad move. I wouldn’t have had any liquid assets left over for getting me through a rainy day. The interest I paid on the loan was an acceptable price for reducing my overall risk exposure.

Even if Alphabet has $80B sitting in the bank, they could quite reasonably arrive at a comparable decision.

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