[plmpsu]

Quoting:

In addition, Alphabet has reached an agreement to sell $10 billion of stock to Berkshire Hathaway Inc. in a private placement, comprised of $5 billion in Class A Common Stock at a price of $351.81 per share and $5 billion in Class C Capital Stock at a price of $348.20 per share.

This investment by Berkshire Hathaway adds to the position it has built since Q3 2025.

[bel8]

They know Google has a ton of data to train LLMs on.

Recently I have been asking YouTube's new AI about some videos ("when is Steam metrics mentioned in the video?" for example), which means they also index videos. This is an unthinkable amount of data.

I'm actually impressed at how bad Alphabet is with LLMs since they invented the thing as we know AND have all the data to train on, yet OpenAI and Anthropic are eating their pie.

[marcus_holmes]

Kodak problem. Kodak invented the digital camera but their revenue came from making photographic film. They were unable to take advantage of their invention because it would cannibalise their revenue. That didn't stop other people and the revenue died anyway.

Google's main revenue is ads based on search. LLMs are a competitor to search. Creating better LLMs will cut into search volumes.

In any large organisation this is extraordinarily difficult to manage - they have to incentivise the new tech that is actively harming the current revenues, while maintaining as much of the old revenues as possible, without creating internal conflict between these two parts of the organisation that will kill it.

Though in fairness to Google they do seem to realise this and are trying to adapt - they're letting the LLM folks mess with search. It'll be interesting to see how this goes.

[wrsh07]

This is a sensible-seeming take at first blush, but it doesn't hold up to any scrutiny (or maybe my scrutiny is faulty - you tell me!)

Sundar and many of his executives have certainly read or heard of The Innovator's Dilemma, and I expect they're all moderately paranoid that it will be their downfall.

Also, that's not it. Google has a great ai app called Gemini where they have at various points hosted the top ai image generation model (certainly for speed, and for a while for accuracy) and have innovated with features like deep research

They are monetizing their ai conversations more effectively than OpenAI could dream of via ads and chat in Google search.

They are heavily investing in compute and talent.

When they've added llm results to Google search it has _increased_ engagement and re-engagement.

What part of the competition are they blissfully ignoring?

(I have counter arguments to some of these points, but I would rather hear other people's)

[marcus_holmes]

I heard Google search volumes by humans were declining, but I can't find the reference now so may be wrong. It's definitely changing the entire SEO industry.

Are they actually implementing ads in chat yet? I haven't seen an ad in Gemini yet.

Again, the results I've seen is that LLM results in search have resulted in more zero-click searches (as a proportion of all searches), which isn't increasing engagement? But again, I may be wrong, what are you basing your assertion on?

I didn't say they were blissfully ignoring anything. I gave them credit for knowing the situation they're in and doing something about it.

The problem that I was talking about (probably badly getting my point across) is that it's internal conflict and strife that causes the pain here. One part of the company is incentivised on increasing revenue on the existing business. The other part of the company is incentivised on increasing revenue for the new business. But the new business is at the expense of the old business, so it sets up internal conflict where each part of the business tries to protect its own incentives. And Google has always been afflicted with rife internal politics.

[surajrmal]

Google search related ad revenue is still going up. Volume isn't everything. Personally, as llms have gotten better I do more and more product research on Google.

[thefounder]

Even if they include ads in Gemini the issue is that Gemini is not the best AI app. It’s maybe the 3rd or 4th. So if Google becomes the 3rd best “search/AI engine” the future is not that bright.

[surajrmal]

Search's AI mode is by far the most popular "AI app". Most of the time I don't end up using Gemini, it's because search's AI mode is good enough for my needs and I use it out of habit. I imagine a lot of other would-be Gemini users are in similar shoes.

[wrsh07]

Gemini is a brand new surface that Google has created to capture the current excitement around AI, but it's not the only surface into which they're shoving AI.^

ChatGPT's growth is incredible, but they essentially have to get all of their growth from inside codex or ChatGPT apps. Google can auto query Gemini with every search. There's an interesting piece of data which is that this tells them (on a conditioned basis^^) when is the chat result more effective than the search and vice versa?

Google can force growth of Gemini by leveraging their existing properties. This is a huge asset, and if you're wondering why Meta has artificially high usage of their LLMs it's because distribution is hard and Meta and Google have a lot of surface area to distribute on

^ no, I don't mean this as a compliment, although it does lend credence to the idea that Google is willing to update its current products with AI.

^^ ie conditional on the user's willingness to view the chat result

[gls2ro]

The thing about Innovator's Dilemma is that even if you know about it you mostly cannot escape your own company culture and norms.

If there is a "crack" there you might be able to get out of it, or it will let a disruptive idea to grow, but my way of thinking about innovator's dilemma is that is it a "culture bias": knowing about it give you some small advantage but it needs a real change to maybe have a chance to escape/act on it and the most important part is that under pressure it will quickly and imperceptible run the entire process or decision making.

[wrsh07]

Google ran a code red for a couple months iirc

But I also disagree with your reading of the innovators dilemma. You're being far too absolute

[keeda]

I agree that all of today's CEOs have learned from history and are paranoid about disruption, and I agree that Google is pivoting effectively and will even thrive in the AI era, given their technical and distribution advantages... but I think their revenues and profits and dominance will be much lower than what they are today: https://news.ycombinator.com/item?id=47957708

[wrsh07]

This take overlooks most of the work that Google has been doing in the past decade.

Have you seen their Cloud business?

Moreover, Google has continued to drive search growth since ChatGPT arrived and is executing competently. Their models are good (not great), but they have enough compute and one of the best ML-focused chips such that they aren't beholden to Nvidia (instead, they're beholden to fabs: tsmc - this is a much better dependency since Nvidia is hell bent on extracting as much value as they can from their position in the stack and it would be against the nature of tsmc to behave similarly)

Will Google's ad revenue decrease? Advertising is an incredible business because it is anti fragile.^ Even if search revenues decrease from their current highs (I would bet heavily against this), they still have YouTube with shorts and a robust display ads business that is going to improve if AI supercharges the economy (more companies - # startups founded in Jan 2026 is much higher than # founded the previous January, more products, advertising and distribution become the differentiators for these products)

If you're wondering how anthropic is going to continue to grow its base, the answer is advertising. In fact, Google is situated to fundamentally support everything that anthropic needs. Who cares if they make worse margins than anthropic? They'll benefit from the entire ride up, and they'll do the same for the next startup of that scale.

^ https://stratechery.com/2024/metas-ai-abundance/

[keeda]

Right, but my theory is that the ad business, still the biggest chunk (75%+) of their revenue, is extremely hyper-optimized for the current search journey-based UX and enjoys a monopoly + auction rigging premium (e.g. Project Bernanke) primarily through tremendous ad volume. That is, their current growth is largely based on stuffing more and more ads into commercial-intent SERPs.

However the agent-based conversational future simply does not support that level of valuable [1] ad volume, which collapses Google's carefully optimized tech+business stack.

Like I said, they will still thrive, but more because of GCP (which might see the biggest growth due to AI and the other tech + infrastructural advantages you mentioned) and the other businesses (YouTube, Waymo, etc.) However, their current cash cow is being disrupted, primarily by themselves, and I don't yet see how they can monetize agents nearly as lucratively as they've monetized search.

[1.] Sure, they could keep stuffing ads into each turn of the conversation, but 1) as I theorized in the linked post, those would be meaningless and low-value, and 2) that could just push users to competitors like ChatGPT, Anthropic or Perplexity that can offer a cleaner UX because they're starting from a clean slate and don't (yet) have the same revenue expectations to meet.

[djhn]

On TSMC: what is your reasoning or source of belief that ”extracting as much valie as they can” is against TSMC’s nature? Is there some charity charter or non-profit governance arrangement I’m not aware of? Or are you saying that geopolitics affects their pricing power?

[CuriouslyC]

Google doesn't seem to "get" agentic autonomy. Their models are trained to solve short problems really well, but they get confused over long time horizon tasks and kinda suck at tool calling to boot.

[dominotw]

> What part of the competition are they blissfully ignoring?

coding models? their own devs use claude code.

[smth-smth-ai]

> Kodak invented the digital camera but their revenue came from making photographic film. They were unable to take advantage of their invention because it would cannibalise their revenue.

a bit more nuanced take on the failure would also account for executives backgrounds at the critical period:

- in 1981 Vince Barabba — Kodak's Head of Market Intelligence — conducted an extensive internal study that explicitly concluded digital photography could replace film and that Kodak had approximately 10 years to prepare for the transition.

- Kodak's leadership in 1980–1993 saw the company through the lens of its founding identity — silver-halide chemitry, precision coating and manufacturing, and the extraordinarily high margins of the film-plus-processing business. This identity-driven decade was spent on failed diversification and defending film instead of building an electronics cost structure and a defensible high-margin position. They steered capital and attention toward businesses that fit that self-image (specialty chemicals, pharmaceuticals, hybrid film products) rather than toward digital cameras, which meant fighting Sony and Canon on low-margin electronics turf where Kodak felt no competence and feared cannibalizing film.

- It was an inside executive culture, crystallized in the 1990 choice of film-lifer Kay Whitmore over the digital-minded Phil Samper. When Chandler retired, the finalists were Whitmore and vice-chairman Phil Samper, who had a deep appreciation for digital technology. The board chose Whitmore, and was explicit about why: as the New York Times reported, Whitmore said he would keep Kodak closer to its core businesses in film and photographic chemicals. Samper resigned and went on to become president of Sun Microsystems and then CEO of Cray Research — i.e., to lead exactly the kind of digital/computing companies Kodak was avoiding becoming.

- so when Kodak did get serious to compete in digital (in 1993 board made Fisher the CEO, he came from running Motorola and held an engineering degree plus a doctorate in applied mathematics) it did so as one commodity hardware maker among many and that was too late since film began to drop as digital started to pick up, exactly as Vince Barabba predicted in 1981

[Saline9515]

LLMs still need a search API, and use it a lot.

Google is well positioned to earn from this service, especially if they can prove that their search service is superior to competitors. While they lose some of their moat, they are well positioned to dominate the market, just like they did in the consumer space.

[gmerc]

That’s not what claude code does… and that’s exactly the dilemma for Google.

[Snafuh]

Claude Code is not the majority of AI usage.

People asking any AI chat interface for ideas for their honeymoon will trigger some kind of search. SEO is still relevant and Google might still be able to sell top spots in their search so LLMs will pick it up.

[freedomben]

exactly. Claude is in a niche. It's a high-value niche right now, but a niche nonetheless. Normies don't use claude much based on the numbers I saw. Search is still highly relevant and Google seems well positioned to capitalize on it.

[dominotw]

so the argument here is that its too niche for google to care ? i dont belive that they made explicit decision to make a lame version of claude code that their own devs dont use.

[marysol5]

Yeah but LLM's don't offer you an advert.

"You tried to find a recipe for cupcakes, well all I can offer you is an advert on kitchen appliances"

[swores]

> "LLM's don't offer you an advert."

Some already do, and some of the ones that don't will in the future.

See for example https://help.openai.com/en/articles/20001047-ads-in-chatgpt

Of course that's not to say that the advertising situation will be identical to that of pre-LLM search engines, and the differences may lead to radically different economic models and user experiences. But I was just correcting your statement.

[lern_too_spel]

These people know about the innovator's dilemma. Their problem is incompetent product and people management, same as it has always been. Talk to anybody working on Gemini, and it's obvious that they're wasting a tremendous amount of effort and talent.

[mitchell_h]

I use anthropic's models daily, and sometimes switch to Gemini. Google is losing the marketing front BADLY, but their AI service is surprisingly great. It's far cheaper than anthropic for one. and for my kind of research it's just better.

[lemax]

I'm quite certain that Google's AI services are likely the most used in the world right now by virtue of having the widest distribution. It's in the search box. It's on your Android phone. Just because they aren't the preferred coding or research agent does not mean they are losing - that's a pretty small slice.

[dansquizsoft]

It can be everywhere, but that doesn't mean users are paying or even value it.

[brookst]

See also: Windows / Notepad / M365 / GitHub / Paint / Xbox / Azure / Solitaire / D365 / Security Copilot.

[pineapple_opus]

Yeah this seems true. Claude Code are famously dubbed as best AI coding agent, but google doesn't care about that niche I guess. Somehow, I still rely on google search as they have diversified it.

If you ask questions, it will enable "AI overview" , but if we search about particular object/platform like "Google stock" or "bbc news", it will give the old classic search experience and we woulnd't need to swallow "AI overview" pill in that case.

[marysol5]

I tried using Gemini CLI to sort some code issues for me, ran out of tokens mid-way through, even though I have Gemini Pro.

Turns out licensing is separate for "code" and "pro"...

[freedomben]

Same happened to me. That was the death knell for Gemini as a coding agent to me. I even paid for a whole year...

I highly suspect they opaquely lowered usage limits on me.

[vasco]

Is it? My mom and all her friends use "the intelligence". What is it? Gemini, because it's on their android phone.

[marysol5]

Apple played a blinder by calling it "Apple Intelligence".

Well done lads

[enos_feedler]

who cares about marketing when you have distribution? Probably a smart move to pump dollars into the product and not the marketing.

[jgalt212]

in high margin businesses, customer acquisition is everything.

[SOLAR_FIELDS]

If your product becomes commoditized, it’s no longer a high margin business

[mandeepj]

> If your product becomes commoditized

Depends on the product - whether protein bars, salty chips, cellular service, or IPhone or something else. If your product has a flavor, it’s never going to get commoditized. Coke still tastes better than Pepsi.

[aethelraed]

You can have a high accounting margin and a product with price equal to economic marginal cost—externalities, cost of capital, barriers to entry… DRAM is a commodity but has (currently) a high margin.

[enos_feedler]

And Google acquired you in 1998 with search.

[lanthissa]

flash 3.5 is the best price/performance model for what i'm doing. I had been using opus for everything but as we started running many agents at once, and then eventually agent managing sub agents frontier is not an option.

we started model testing the cost/performance of our skills and agents and flash 3.5 wins in most things.

As people develop harnesses for their codebase i think the intelligence required comes down a lot.

[tempest_]

I have not tried the Gemini CLI in a few months but when I did it was a shit show.

Google makes it very hard to use their shit and it was full of bugs.

Anthropic's current run is based entirely around Claude Code in this space and the last time I used the gemeini-cli it wouldnt give me access to the latest models and I was paying them for the privilege

[Tuna-Fish]

Google trashed the Gemini CLI client and replaced it with agy (antigravity), which is written in go and is much nicer.

[throwawaycan]

Interesting you say that. Every user I speak to says antigravity cli is missing lots of features and Gemini cli was working quite well. Same for me.

[Tuna-Fish]

It's not as feature rich, but has also not crashed once for me, unlike gemini cli, which was a flickery, unstable mess.

[tempest_]

So they did.

https://github.com/google-gemini/gemini-cli/discussions/2727...

I get the complaints in that thread but I still think it is hilarious. That repo is a gong show to random shit and perhaps one of the best worst examples of "opensource" LLM development.

[marysol5]

It will also just sit there "thinking" for ages, if whatever you are doing requires an input (like sudo)

Sometimes you have to tab across and give it a PW, but it seemingly is incapable of parsing that, and just asking.

Kiro, what we use at work, on the other hand will just prompt you. (And doesn't like taking credentials directly)

[marysol5]

We use Kiro (AWS) and Gemini (Google) at work.

Kiro is of course really good to back into AWS stuff, it knows more about AWS than Amazon themselves!

Gemini is really good at understanding my inane ramble and mis-spelling

[sumoboy]

I think Google is a bit sandbagging here knowing they have all the data and likely better models hiding. My theory is it's a bit of not disrupting the stock market direction by exposing whose really the boss. If they can do it cheaper, faster, and better, people start asking questions, especially with upcoming IPO's.

[mgfist]

This makes no sense. Google is beholden to its own shareholders, not the markets at large.

In any case, it's well known that devs in Google have liked anthropic/openai models for coding more than gemini, so unless they're hiding their best models from the people within, I think it's just the case that they're behind.

[hattmall]

It's more that they know they can eventually clone any successes the other companies have and steal their market share. Their really is no moat. In a more normal environment they would be buyout candidates but that's a bit too far gone at this point, so you just let them run until they are out of gas and Google can benefit from any advances without upfronting the cost.

Even with anthropics record breaking revenue growth I don't see how the pure AI companies can sustain, but the catch-22 is that any obvious pivot proves that. This puts the more traditional tech companies in position to ride the back of the wave until the growth curve tops.

[JumpCrisscross]

> they know they can eventually clone any successes the other companies have

Google has gone all in on AI. To the point of challenging their own core product. Apple is waiting and seeing. Google is building and distributing, albeit with terrible marketing.

[lukeschlather]

Coding is a pretty small slice of the markets in play. Google's models are driving cars right now. Using coding agents doesn't give much insight into performance in the broader world; I would assume assume Google is performing better in general even if Claude or Codex is currently outperforming for coding.

[mgfist]

> Coding is a pretty small slice of the markets in play.

I don't think that's true, mostly in that a lot of usecases are solved via coding models + a harness.

> Google's models are driving cars right now.

Yes + other models like alphafold. But those are (relatively) specialized models. Besides, the comment I was responding to was saying Google is sandbagging the market to keep it calm or something. I don't disagree that Google is doing well overall and has some clear advantages

[s1artibartfast]

Google also owns 15% of anthropic.

[swores]

Pedantic correction that doesn't change anything other than accuracy: it was reported over a year ago to be closer to 14% than 15%.

https://www.theverge.com/news/627849/auto-draft

But I believe since then Anthropic have raised more money, almost certainly diluting Google's stake (I could be wrong and misremembering that Google didn't partake in the additional fundraising). I have in the back of my head that Google is down to something like 10% now, but don't have time to go and find details to fact check that, sorry!

[WarmWash]

It's important to remember that the cloud division, rapidly becoming Google's golden goose, does not give one fuck about Gemini and would happily sell out all of Gemini's compute to Anthropic and OAI if given the opportunity.

[logicchains]

Google doesn't suck at LLMs, they suck at customer service. There was a period where Gemini Pro was the best LLM out there, before they gutted it with quantization. It's like they didn't realize that "provide a great product, get people hooked then cut the quality" doesn't work when switching costs are so low. As with GCP, putting the wants of SREs over the wants of customers is not how you gain lots of customers.

[tekacs]

I don't think they 'index' videos, per se. They just point the model at the video's transcript on demand when you ask a question, I believe. Doesn't change any of your conclusions, though. You're absolutely right, they have an absolute ton of data.

[gniv]

> I don't think they 'index' videos, per se.

I'm pretty sure they do. They already index metadata (you can see it in the web search results) so indexing the transcript is relatively easy.

[okdood64]

> yet OpenAI and Anthropic are eating their pie

I'm actually impressed by how much the Hackernews crowd is sleeping on Google & Gemini. Yes, it's lagging behind in coding, but it's consistently much better and more reliable at literally everything else.

Also there was a period of time when Gemini was the best model out there...

[polski-g]

It's pretty hard for the nerd crowd to believe that only 4% of traffic to GPT is coding related.

[travelalberta]

I would have assumed that it was like 50%... I always assume everyone knows how to code or is code adjacent in some way. Remind me to go for a walk today...

[onlyrealcuzzo]

I wouldn't be surprised if Google's logs alone are a substantial portion of all data created daily...

[monkpit]

Do they even do logging in the traditional sense? Surely they have some bespoke googly solution.

[marysol5]

Some of the stuff that turns up on Googlebot, you really have to think "where on earth did you find that? Absolutely nobody, nowhere had a hyperlink to that"

[ApolloFortyNine]

I'm guessing one goal of the semi recent AI translated subtitles on every video, is now every video has a transcription.

It's actually incredibly useful if you just want to summarize a video, or my use case, want a text tutorial of something that's a video.

[marysol5]

Their transcribing and summarisation of Google Meetings is pretty good.

I have a boss who loves to rattle on for ages, and it gives a breakdown of what on earth he was on about

[TacticalCoder]

> I'm actually impressed at how bad Alphabet is with LLMs ...

I'm still on Anthropic models to code but I'm on Gemini 3.5 Flash for everything else. How can you say Google is bad at LLM when their little flash model is literally SOTA on many benchmarks?

> ... yet OpenAI and Anthropic are eating their pie.

They're eating nobody's pie: it's a new pie. Google is a $4.5 trillion company, the 2nd biggest in the world as I type this.

Seen that fact and seen how good Gemini 3.5 Flash is, I'm not really sure Google is "bad at LLMs".

[jonwachob91]

I've also asked the youtube ai about when some things are mentioned in videos, and upon verification the ai is just hallucinating.

[CamperBob2]

Not only that, but the same webmasters who try to shoo AI crawlers away actively court Google's bots.

[cj]

Really? Every business owner I know outside of HN wants to be discoverable by LLMs.

[iamacyborg]

Being discoverable is one thing, having your content stolen wholesale is another

[losvedir]

Most of the economy is not journalists or people who sell "content" online. In most cases I can think of - retailer, restaurant, hotel, plumber, any local small business, they want their content ingested. That means the AI chatbot knows about them and they can be in answers potentially.

[Polizeiposaune]

And having your content rendered inaccessible to humans by a DDoS attack from overly aggressive webcrawlers that ignore robots.txt is yet another.

[sirsinsalot]

I think Google is doing the right thing. Using LLMs for coding is the shiny low hanging fruit but it isn't what is going to make the tech ubiquitous. That'll be finding applications of it to real data problems.

Google knows LLMs are the new UI, not the new IDE.

[tgsovlerkhgsel]

My guess: The company culture means that the best people went to other companies.

[marysol5]

Google has been diabolical with forming teams to develop a product, then disbanding the team, and then moonlighting the product right after deployment.

cries in Google Glass

Wild that Meta has that product now decades later, which isn't even half of what Google offered.

[imtringued]

Youtube has had AI generated transcripts with autotranslation for the subtitles for years, not to mention the forced AI dubbing on mobile phones.

Doing a little bit of RAG on the transcript hardly sounds impressive.

[hirako2000]

Yet, Gemini can't even get YouTube URLs right half of the times.

[amelius]

> I'm actually impressed at how bad Alphabet is with LLMs

Not my impression. Lately I think Gemini is superior to ChatGPT and Claude in coding (I'm mostly using it with scientific stuff in Python).

[alecco]

> They know Google has a ton of data to train LLMs on.

And they have a massive amounts of TPUs. And yet... their models are way behind.

[f0rgot]

Are you sure it’s not using transcripts? That would be equally useful but technologically less impressive.

[tayo42]

Turning all of those annoyingly verbose and long YouTube videos into text that could be searched, summarized and referenced easily would be amazing

[rvba]

Alphabet still cant fix search in Android Play store, so it works

[wffurr]

You are assuming that Play store search is even broken from their perspective. I bet all their internal signals on it are positive, as in they make money on the fraud and scams, and crack down occasionally just enough to retain user trust.

[marysol5]

How good is YT's data though? Have you seen their Auto Caption? It's utterly incapable of understanding speech.

Auto Dubbing on the other hand is incredible, translating Russian/Ukranian speech with different voices and accents for each speaker, during a fire fight is wild.

[gniv]

> Have you seen their Auto Caption? It's utterly incapable of understanding speech.

How recently have you looked? I think nowadays it's quite good.

[hirako2000]

That voice though is atrocious.

[ecommerceguy]

pretty sure its only for videos with cc enabled.

[MagicMoonlight]

Everyone mocked them for paying for YouTube for years with no real income. Now it’s the most valuable data source in the world.

[JumpCrisscross]

It's genuinely interesting to see Google fund this with equity versus debt.

[panarky]

It's also interesting watching Alphabet buy back $100 billion of stock over the last two years, when the price was half what it is today, only to turn around and sell shares now at the higher price.

I know GAAP accounting won't recognize any capital gain on these treasury operations, but from an economic standpoint this financial judo creates a lot of value for existing shareholders.

[lanthissa]

this is the finance team doing a fantastic job. keep in mind they're raising this cash right before 3 major ipos in their sector which people will need to raise money for and will fight against htem in the narrative.

If i was a google cfo and was trading at a premium to my peers before that, i'd want to raise the cash now. Look at MSFT, they're trading at 25 forward p/e and were buying back shares at 40. If they have to issue equity over the next few years the spread between teh performance of the 2 cfos could be 40-50b on that alone.

[sethops1]

"Buy low, sell high" isn't exactly financial manipulation.

[lnenad]

I think the point OP was trying to make is when a person "buys low sells high" they pay taxes on the gains.

[jamestimmins]

My first thought was my finance professor telling us that companies always raise with equity when they think their equity is overvalued.

[ip26]

You’d think Berkshire would be at least passingly aware of that principle, though.

[gen220]

It’s not easy to buy such a large tranche of shares at a fixed and fair price in a single transaction!

Both parties get something they want this transaction. Alphabet gets the Berkshire halo effect and a guaranteed buyer of $10 billion worth of equities, Berkshire gets a large tranche of equity at a price they believe is fair.

I think they view Alphabet as their next Apple, and a relatively safe place to ride out whatever happens with AI: Alphabet is fairly well positioned for the upturn or the downturn, especially now with this expanded warchest of cash.

[minraws]

They are buying 10B$ worth of shares for 10% discount from current valuation, and if their goal is to hold for 10-20 years, then it could be a good hedged buy in favour of AI.

Even if AI crashes 90% SpaceX, OpenAI & Anthropic are worth say 200B each post IPO. In 10-20 years with similar effects to Internet they might be the next Meta. Apple, Microsoft of the world.

But Google will likely still be the leader if it can make good on it's advantages.

[lanthissa]

Just as a google shareholder, this company bought back shares hand over fist at a low p/e for a few years, issues 100 year debt at low rates, and is selling equity when its at a premium to its peers right before 2-3 major ipos of competitors put selling pressure on the stock for a while.

I don't know who's going to win the llm battle, but googles finance team has been doing their job fantastically.

[3ffd]

Really? lol.

Tech firms should always have a buffer and never get too close to the optimal debt ratio.

I think they have learned a lot re. what happens if you are asleep at the wheel now.

[JumpCrisscross]

> Really?

Yes. Their competition is deploying debt and Google has low leverage. They also have $100+ billion cash on their balance sheet.

> Tech firms should always have a buffer and never get too close to the optimal debt ratio

...why is this especially applicable to tech firms? (Or a tech firm like Google?)

[swyx]

google stock is $376 a share rn. berkshire got a favorable discount here. is this... normal? they didnt have an obligation to offer it to the market to find the best price?

[gniv]

The deal might have been signed a month ago, just before earnings, when the stock was about that price.

[pm90]

if they sold that much in the open market it would probably decrease the price

[simpsond]

Large block trades happen off exchange often. Secondaries like this are common enough.

[christkv]

Why are they able to do this without offering it to the market being a public company.

[cmiles8]

These special placements are essentially a form of financing.