Deep Dive: Why Google Just Raised $85 Billion It Didn't Need

**Zaid** (0:00)
Welcome back to The Rundown for another weekend deep dive. Today, we are talking about Google and their record-breaking $85 billion stock sale. This is the largest stock sale in history, and it's coming from a company that's already sitting on $127 billion in cash. So why is one of the richest companies on the planet selling its own stock for the first time in 20 years? Well, in this episode, we're gonna break down what Google actually did, why other big tech companies might be next in line, and what this raise signals about the AI trade moving forward. We got a great one for you today.
Let's dive in.
On June 1st, Google announced plans to raise $80 billion by selling their own stock and using that money to fund their AI infrastructure build out. And when this news came out, it shocked a lot of people on Wall Street and Silicon Valley. See, Google is one of the most profitable companies on the planet. Last year, the company made $165 billion in operating cash flow, and they already have about $127 billion in cash. So why is Google selling $80 billion worth of their stock and diluting existing shareholders? We'll get into the reasons a bit later, but first I want to do a quick finance 101 on how companies raise money because it's the key to understand this whole story. See, when a company needs money, there are three options that they have. The first option is just to use their own cash that they have sitting in the company's bank account. This one is pretty self-explanatory. Option two is borrowing the money by issuing debt. In the corporate world, this usually means selling bonds. Now, a bond is basically an IOU. Bond investors hand the company cash today, and the company pays the bond holder's interest every year, and then at the end of the term, the company pays back the money in full. The maturity of corporate bonds can range from one year all the way up to 30 years. And typically, a company like Google with a pristine credit rating and a robust business usually borrows money because it's cheap for them. They can issue bonds at some of the lowest rates of any company on earth because bond holders know that they'll likely get their money back. But Google decided not to do that. They went with the third and usually last option a company does if they need money. They decided to issue more stock. See, most companies don't want to do this because it dilutes existing shareholders. With more shares being created, each existing share is worth a smaller piece of the company, and shareholders don't like that. So that's why selling stock is usually the last resort when a company needs money. Typically, the companies that sell stock are like startups burning cash or struggling companies that can't borrow. Google is obviously neither, which is why this stock sale was so shocking from them. In fact, this is Google's first stock sale since 2006 when they raised the cute little $2.1 billion. But look, the market didn't seem to mind too much. In fact, the demand for Google's stock sale was so hot that Google actually upsized the deal from $80 billion to nearly $85 billion. This also makes Google the largest stock sale in history of capital markets. The old record was roughly a $70 billion stock sale by the Brazilian oil giant Petrobras back in 2010 Oh, by the way, one little detail here. Berkshire Hathaway is actually anchoring this deal with a $10 billion investment, and for that, they're getting a 6.5% discount. This investment by Berkshire adds to the roughly $20 billion position that Berkshire already built up since 2025 Now, the wildest part to me in all of this is that back in 2024, Google actually spent $62 billion of their money buying back their own stock, and then in 2025, they spent another $45 billion buying back their stock. But then starting in the first quarter of 2026, they quietly paused their stock buyback program, and now they're doing a complete 180 by selling their own stock, to raise money. And I think there are three main reasons why Google is doing the stock sale, instead of just taking on more debt. Reason number one is that Google has already raised over $85 billion of debt in just the past year, across six different currencies. Their total debt is now over $100 billion. Just for some context here, back in 2022, Google's debt was at just $11 billion. Now, $100 billion debt load for a company of Google size isn't really concerning. The point here is that Google has already tapped the debt market multiple times over the last year, and they didn't want to keep going back to that well and put their credit rating at risk. Now, that brings me to the second reason for the stock sale. It's that Google stock has actually more than doubled in the past year and is trading near all-time highs. Rule number one of selling anything is to sell it when it's expensive, and Google is selling their own shares near all-time high levels. And finally, I think the third reason for this equity raise by Google is that the big IPOs are happening. SpaceX just had their $75 billion IPO, and then OpenAI and Anthropic have both confidentially filed to go public soon, so they're likely going to chase a similar number to SpaceX. So I think Google wanted to raise their money from the equity market before the giant IPOs hit. So yeah, I think those are the three reasons why Google chose to sell their stock instead of taking on more debt. But now let's talk about why a $4 trillion company needs to raise all that money in the first place. And this is a potential sign that the AI bubble is about to pop.