Overview
Alphabet Inc. announced a multi-faceted $84.75 billion capital raise to help fund the expansion of its artificial intelligence infrastructure as the company reported record user growth across its Gemini platform and strength in its Cloud business. Alphabet said the Gemini app reached more than 900 million monthly active users as of May, up from 400 million in the same period a year earlier.
Usage and product metrics
The company reported several scale metrics for its AI products. Paid subscriptions to Gemini rose to 350 million users, while the company said its AI Overviews feature now reaches over 2.5 billion users each month. Alphabet is processing 3.2 quadrillion tokens per month across its platforms.
Alongside these growth figures, the firm said it has reduced Gemini serving costs by 78% while operating at this scale. Product roadmap comments in the release noted plans to launch Gemini 3.5 Pro in June, following the rollout of Gemini 3 in November.
Enterprise demand and Cloud backlog
Alphabet stated that enterprise demand currently exceeds available supply. Its Cloud division backlog nearly doubled quarter-over-quarter to more than $460 billion. The company said it expects to recognize in excess of 50% of that backlog within the next 24 months.
During the first quarter, Alphabet said it signed twice as many deals in the $100 million to $1 billion range compared with prior periods, underscoring larger enterprise engagements.
Details of the capital raise
The capital-raising package includes 25,459,689 shares of Class A Common Stock priced at $355.1982 per share and an equal number, 25,459,689, of Class C Capital Stock priced at $351.8018 per share. The company is also offering 167,500,000 Series A depositary shares and 167,500,000 Series B depositary shares. Each depositary share represents a 1/20th interest in newly issued 6.25% Mandatory Convertible Preferred Stock, and each of those depositary shares is priced at $50.
Alphabet noted that the total raise includes a previously announced $40 billion at-the-market offering program and a concurrent $10 billion private placement.
Underwriters have been granted a 30-day over-allotment option for up to 3,818,953 additional shares each of Class A and Class C stock, and a 13-day option for up to 50,000,000 additional depositary shares. The Class A and Class C offerings are expected to close on June 4, 2026, with the depositary share offerings expected to close on June 5, 2026.
Proceeds and capital spending outlook
Alphabet projected that net proceeds from the core stock offerings will be approximately $17.8 billion, while the depositary shares are expected to generate roughly $16.6 billion after underwriting discounts and expenses.
The company said it is maintaining its full-year capital expenditure guidance in the range of $180 billion to $190 billion. Alphabet also informed investors that capital spending will increase in 2027 compared with 2026.
Implications highlighted by the company
Alphabet framed the capital raise and timing of product launches as measures to support rapid AI-driven growth and to meet strong enterprise demand. The company emphasized scale efficiencies for Gemini and noted significant deal activity in its Cloud business as part of the backdrop for the financing.
What the company disclosed - factual points
- Gemini app monthly active users: over 900 million as of May, up from 400 million in the prior-year period.
- Paid subscriptions: 350 million users.
- AI Overviews reach: more than 2.5 billion users monthly.
- Token processing: 3.2 quadrillion tokens monthly across Alphabet platforms.
- Gemini serving cost reduction: 78%.
- Cloud backlog: more than $460 billion, nearly doubled quarter-over-quarter.
- Expected backlog recognition: more than 50% within 24 months.
- Capital raise composition and pricing as detailed above; expected closing dates in early June 2026.
- Net proceeds approximations: $17.8 billion from core stock, $16.6 billion from depositary shares after fees.
- Full-year capex guidance: $180 billion to $190 billion, with higher capex anticipated in 2027 versus 2026.
Conclusion
Alphabet set out a large capital raise tied directly to its AI infrastructure needs while reporting substantial user growth for Gemini and rapid expansion in Cloud contract backlog. The company provided specific financing mechanics and timing, along with its expectations for backlog recognition and capital spending for the year and next year.