Berkshire Hathaway Just Invested $10 Billion in Google at a Private Placement Price. Here's Why Retail Investors Should Pay Attention
Berkshire's investments show who it thinks will be a winner in AI.
By Jack Delaney
When Greg Abel took over for Warren Buffett as CEO in January, many were wondering what the new Berkshire Hathaway (BRKA +0.74%) (BRKB +0.84%) would look like. It hasn't taken long to see an early picture, as Abel has worked quickly to leave his mark.
Berkshire's new CEO has been deploying the company's cash hoard, including multiple investments in Alphabet (GOOG 0.61%) (GOOGL 0.85%). For investors, this shows not only that a new era of Berkshire is in full swing but also that Berkshire is offering a ringing endorsement of Alphabet.
Not business as usual
The first signal worth watching from this deal with Alphabet is Berkshire's aggressiveness. Since taking over for Buffett as CEO, Berkshire has exited multiple positionsand has agreed to acquire the homebuilder Taylor Morrison Home in an all-cash deal worth roughly $6.8 billion.
In addition, Berkshire's investing in Alphabet may indicate more openness to tech investments in the future. While Berkshire is still picking its spots and acting with purpose, it appears to be striking faster under Abel's early tenure. For some shareholders, that's welcome news, as they wanted to see some of the company's $397 billion cash pile (as of the end of March) put to use.
A $1 trillion endorsement
The second signal to watch from this news is the seal of approval Berkshire is placing on Alphabet. When a company worth more than $1 trillion wants to keep buying shares of a stock, it's about as strong an endorsement as you can get; Berkshire has been steadily buying shares of Alphabet since Q3 2025.
With Alphabet's market cap above $4 trillion as of June 22, it can be difficult to view it as undervalued. But Berkshire still worked out a deal in Alphabet's $80 billion equity offering.
It received $10 billion in Alphabet common stock in a private placement at a discount of more than 6% to Alphabet's June 1 closing price. Those shares were split between $5 billion in class A voting shares and $5 billion in class C nonvoting shares.
The cost of being a leader
In 2026, investors have seemed less patient than before with companies that talk about their artificial intelligence (AI) spending and have little to show for it. While Alphabet expects capital expenditures to fall in a range of $180 billion to $190 billion this year, the results from its spending are also showing up in its quarterly earnings reports.
In its 2026 first-quarter earnings report, Alphabet's cloud division reported that revenue increased 63% to $20 billion,with total revenue increasing 22% to $109.9 billion.
The investment from Berkshire provides financial backing, and it also offers a vote of confidence in Alphabet's vision. If it keeps building out AI infrastructure and the demand shows it justifies the costs, Berkshire and Alphabet shareholders will both be happy.