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.
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.
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.
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.
It can be everywhere, but that doesn't mean users are paying or even value it.
See also: Windows / Notepad / M365 / GitHub / Paint / Xbox / Azure / Solitaire / D365 / Security Copilot.
who cares about marketing when you have distribution? Probably a smart move to pump dollars into the product and not the marketing.
in high margin businesses, customer acquisition is everything.
If your product becomes commoditized, it’s no longer a high margin business
> 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.
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
Google trashed the Gemini CLI client and replaced it with agy (antigravity), which is written in go and is much nicer.
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.
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.
Is it? My mom and all her friends use "the intelligence". What is it? Gemini, because it's on their android phone.
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.
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.
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.
> 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.
Apple isn’t waiting and seeing on the hardware side, only implementing AI on the software side, which there doesn’t seem to be much of a demand for them to do. Apple are well set for on-device LLMs and agents with their Mx Max cpu/gpu, and their wait on the rest is saving them hundreds of billions by not burning all their profitability to the ground building Nvidia-filled datacenters the same as everyone else, which is why Google is now having to hunt for extra money by raising capital like this.
search is not their core product though, it's ads. they ain't challenging anything.
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.
Google also owns 15% of anthropic.
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.
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.
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)
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.
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.
I wouldn't be surprised if Google's logs alone are a substantial portion of all data created daily...
Do they even do logging in the traditional sense? Surely they have some bespoke googly solution.
I've also asked the youtube ai about when some things are mentioned in videos, and upon verification the ai is just hallucinating.
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.
Are you sure it’s not using transcripts? That would be equally useful but technologically less impressive.
Turning all of those annoyingly verbose and long YouTube videos into text that could be searched, summarized and referenced easily would be amazing
pretty sure its only for videos with cc enabled.
Not only that, but the same webmasters who try to shoo AI crawlers away actively court Google's bots.
Really? Every business owner I know outside of HN wants to be discoverable by LLMs.
Being discoverable is one thing, having your content stolen wholesale is another
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.
And having your content rendered inaccessible to humans by a DDoS attack from overly aggressive webcrawlers that ignore robots.txt is yet another.
Everyone mocked them for paying for YouTube for years with no real income. Now it’s the most valuable data source in the world.
It's genuinely interesting to see Google fund this with equity versus debt.
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.
"Buy low, sell high" isn't exactly financial manipulation.
My first thought was my finance professor telling us that companies always raise with equity when they think their equity is overvalued.
You’d think Berkshire would be at least passingly aware of that principle, though.
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.
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.
> 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?)
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?
if they sold that much in the open market it would probably decrease the price
Large block trades happen off exchange often. Secondaries like this are common enough.