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We should point out Google shares down just a little bit here, partly on the dilution that will come out of this, but I'm more focused on the money and the money that's being I know they telegraphed this already, but this is already a company sitting on 100 and $5,060 billion cash on their balance sheet. Um, did they really need to go to the public markets for this? Well, right now they feel, you know, the window is right in terms of raising money. We see so many companies, big IPOs, you know, in terms of, uh, the money that is being raised. And, uh, in the case of alphabet, even though they raise their CapEx, it feels like they could do more simply because
they have the advantage of vertical integration with TPUs, their on land, where why would they be equal in CapEx to Microsoft? And that's where I think they are trying to go bigger. So I want you to just take a step back, particularly for our viewers who haven't followed this much. When we talk about seeing, you know, $80 billion. Well, in this case, 180 to $180 billion being deployed on CapEx. Where exactly does that money go? Well, it's for building data centers for, uh, giving money to TSMC to make those TPU chips really doing things on an end to end basis, unlike a Microsoft or a meta that have to buy those chips from Nvidia and pay those, you know, 75%
gross margins. Alphabet is all using its own chips, and even anthropic has trained its model and uses, uh, TPUs even for inferencing. So from that perspective, alphabet is a competitor to and OpenAI and anthropic. It is also a competitor to Nvidia on the chip side. And that's the advantage they have in terms of allocating more of their capital towards the chip making efforts that others don't have the benefit of. So eating its own cooking, and in that sense, you know, fighting multiple fronts here you think about this $80 billion when you think about those, you know, sort of twin races, more than twin races, uh, that it's in right now.
How far does that go to sort of solidifying Alphabet's place and maybe also taking share here. Well, I mean, uh, we know, uh, in terms of their credit rating, uh, they can issue a 100 year bond as well. And, you know, they've been very successful in all sorts of, uh, fundraising, uh, with regards to their data center effort. But look, when it comes to market share right now, we have heard from Nvidia compute is revenue. And you know, the more compute you have, the more revenue growth you will have. And so from that perspective and Nvidia paying TSMC $120 billion just to lock in capacity, goes to show the power of
having that strong balance sheet. And even though alphabet has a strong balance sheet, it doesn't hurt to raise more money. You know, just to go big in terms of, uh, the compute side of things. And this is also interesting that you take a look at some of the details here. This ATM program is intended to also facilitate, for a period of time in admin change in how, uh, alphabet meets the tax obligations when it comes to employee equity grants, saying that this approach will mimic a sell to cover
model, meaning that upon vesting of restricted stock units, shares will still be delivered to employees, net of taxes, that the company will use corporate cash to settle taxes on behalf of employees. I'm going to think about that for a while, but I mean, I wonder how it ties into this talent race that we're seeing among a lot of these big AI companies. I mean, we're talking about AI, but it's being built by humans still. And, you know, I wonder if this is part of that. It certainly is. And look, I mean, if you are an engineer, uh, working in AI at Google and you see, you know, OpenAI and
anthropic going public, uh, there's always that attractiveness in terms of, you know, uh, a fast growing company going public. And that's where Google has to do its part in terms of, you know, uh, retaining their talent. Uh, I do want to ask you about some comments that we heard a little bit earlier or overnight, I should say, out of Jensen Wong at that big conference going on That was going on in Taiwan. Obviously, the big chip reveal of our PCs got a lot of the attention, but he was specifically addressing this issue of, uh, kind of the death of software, basically kind of said and to paraphrase him, look, you know, basically the way
this market is growing, you're going to need more software engineers. And I do wonder, particularly when you look at the rally that we've seen in software games over the last few days, with the kind of premature that investors kind of threw a lot of these names out, out the window. I mean, right now you will see, you know, there will be a lot of back and forth when it comes to software, simply because we had very strong results this earnings season from the likes of Datadog, snowflake, MongoDB. And so, you know, the thesis around, you know, software companies really, uh, slowing down in terms of their growth rate didn't really pan out for a large
chunk of software this earnings season. But look, there's certainly an impact that these model companies have had in terms of the growth rate. So we will see, uh, you know, some of the companies do take a hit as well. So, uh, it will be a little bit of both. For the time being.
