It is a golden rule of finance that what goes out must, at some point, come in. That’s why AI’s biggest spenders are starting to seek new ways to fund their habit. In recent days Elon Musk’s SpaceX and its rival Anthropic have filed for initial public offerings that together are likely to raise more than $100bn. And on Monday, Google parent Alphabet said it would sell $80bn of stock to help fund extravagant spending on data centres.
Google’s capital raise is a good example of how AI has made big numbers all but meaningless. To a $4.5tn company, an $80bn stock issue is practically a drop in the bucket at less than 2 per cent of its market capitalisation. Yet for the financial world at large, tech capital raisings are becoming substantial. Google’s new funds would be equivalent to almost 10 per cent of all equity sold globally last year, according to Dealogic.
What matters more than the sums at stake is the shift they represent. Google has not raised equity capital since 2005. In effect the search giant has, since going public in 2004, had more money than it knew what to do with. Now, its spending plans are so colossal that even with $127bn of firepower in the form of cash and cash equivalents, it can no longer be quite so carefree.