Daily: Google ups equity financing to $85B for AI buildout
7 min read.
A shorter highlight section as I am currently travelling through Shanghai.
Highlights
EU plan to revive chips. The EU unveiled a plan to reclaim tech sovereignty after increasingly fraught relations with the United States has questioned the bloc’s reliance on American technology. This includes a plan to revive Europe’s semiconductor industry.
Musk’s Terafab wins tax exemption. SpaceX’s reportedly US$55 billion Terafab plant won a property tax exemption from the five-person Texas county council that the land sits on, despite broader, growing animosity towards data centres.
Google ups fundraising goal. Google ups their US$80 billion capex fundraising to US$85 billion.
Thanks for reading.
1. Policy and Geopolitics
1.1
NYT (06/03): Europe Wants to Be Less Reliant on American Tech. Here’s Its Plan.
European Union officials unveiled a broad plan on Wednesday to reduce dependence on American technology, which they increasingly see as a threat to the region’s economic future and geopolitical security amid a rocky relationship with the Trump administration.
Under the plan, officials outlined more government involvement in the region’s tech industry to accelerate the construction of data centers and revive its semiconductor industry. It would also push European governments and businesses to purchase technology from domestic suppliers, while potentially barring American firms from cloud computing contracts seen as critical to security.
European leaders have become increasingly alarmed by the reliance on American technology in areas like artificial intelligence, cloud computing and semiconductors. Many worry the dependence creates a “kill switch” that the Trump administration or future U.S. presidents could exploit to block access to essential tech services.
1.2
FT (06/04): SpaceX wins tax exemption for $55bn AI chip plant despite local backlash
SpaceX won a property tax exemption for its planned $55bn Terafab semiconductor facility, despite Texans threatening legal action as opposition to the rapid growth of AI infrastructure in the state rises.
The Commissioners Court of Grimes County voted on Wednesday 4-1 to award Elon Musk’s company a 100 per cent tax abatement and a reinvestment zone designation for its manufacturing project north-west of Houston.
In opening comments to the court in the town of Anderson, Texas, John Federspiel, director of SpaceX’s Starlink satellite group, said there was “no doubt” Texas had been central to the company’s success.
1.3
Korea Times (06/04): China’s AI chip demand pushes Korea into rare surplus with top trade partner
Korea has emerged as a rare bright spot among East Asian economies trading with China, as booming demand for memory chips pushes its balance with its largest trading partner back into a surplus.
The country’s trade position with China had strengthened steadily this year, swinging from a $764 million deficit in December 2025 to a $1.1 billion surplus in February, before widening further to $3.8 billion in May, according to data from Korea’s Ministry of Trade, Industry and Resources.
The turnaround has been driven largely by semiconductor shipments to China, as the global AI boom fuels demand for memory chips. The surge had tightened supply and sent prices sharply higher, with 16 gigabyte DDR5 memory chips up 682 percent and NAND flash memory prices up 807 percent, according to Morgan Stanley.
1.4
Reuters (06/03): AI to double data centre power and water consumption by 2030, UN researchers say
Data centres are expected to consume twice as much power and water by 2030 as they expand to meet the surge in demand from artificial intelligence, U.N. researchers said on Wednesday.
Unless governments heed the rising environmental costs of AI, the rapid rollout could also strain scarce land resources and create mountains of electronic waste, the United Nations University Institute for Water, Environment and Health warned in a report.
1.5
Nikkei (06/04): Applied Materials looks to hire 25% more chip talent in Southeast Asia
U.S. semiconductor equipment maker Applied Materials is aiming to expand its total workforce in Southeast Asia by 25% this year as the region, particularly Singapore, becomes increasingly vital to its manufacturing and research and development operations, a senior executive told Nikkei Asia.
2. Economy, Finance, and Business
2.1
FT (06/03): Google upsizes historic equity raising to $85bn to back AI spending spree
Google has increased the size of its record equity raising to almost $85bn, about $5bn more than targeted, in a sign that investors remain unperturbed by the tech giant’s gargantuan AI infrastructure spending plans.
Gross proceeds from the sale of new class A and class C common stock, as well as a $10bn private placement to Berkshire Hathaway, were expected to total $84.75bn, Google’s parent company Alphabet said in a filing on Wednesday. Earlier this week, it said it expected to raise up to $80bn.
2.2
FT (06/04): Broadcom loses more than $300bn in market value as revenue forecast disappoints
Broadcom shed more than $300bn in market value on Wednesday, putting it on course for one of the largest single-day wipeouts, as the chip giant delivered AI revenue guidance that fell short of investors’ highest expectations.
Shares fell as much as 15.4 per cent in after-hours trading on Wednesday as the US chip company gave guidance of $29.4bn in revenue for the current quarter, above consensus estimates of $28.2bn, according to Visible Alpha, but short of the highest estimates.
2.3
WSJ (06/03): Baidu Sees AI, Chip Business Driving Healthy Revenue Growth
Baidu expects to list its chip unit in Hong Kong within this year, its finance chief said as he projected healthy revenue growth over the next few quarters, supported by artificial-intelligence income.
Henry He, chief financial officer of China’s dominant search-engine operator, gave the timeline during an interview on Wednesday, signaling that plans to spin off and list the business in Hong Kong and Shanghai are on track.
2.4
Reuters (06/03): AI ‘chipflation’ spreading from data centers to wider economy, Morgan Stanley warns
Soaring memory chip prices driven by massive AI demand risk stoking “chipflation,” Morgan Stanley analysts cautioned, as makers of devices from smartphones to PCs are forced to choose between raising prices and settling for thinner margins.
The brokerage said on Tuesday that memory chip prices have spiked six-fold in the past year, as manufacturers have struggled to keep up with Big Tech’s AI infrastructure spending spree and prioritized higher-margin data center chips over those used in everyday devices.
“What began as an AI infrastructure bottleneck is now spreading into hardware margins, device affordability, cloud costs, inflation and policy,” Morgan Stanley said in a 66-page note, adding the crunch has “become a macroeconomic concern.”
2.5
Bloomberg (06/04): Trade Groups Urge US to Boost Memory Chip Supply Strained by AI
A global shortage of memory chips fueled by the artificial intelligence boom poses a growing risk to industries ranging from automakers to producers of medical devices, according to a coalition of US business groups who urged the Trump administration to help increase supply of the components.
In a letter Wednesday to US Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick, nine trade associations representing a range of industries warned that the memory shortage threatens to disrupt critical supply chains and is likely to raise consumer prices in the near term.
2.6
Bloomberg (06/03): Nvidia CEO Pitches ‘Insane’ AI Returns to Billionaire Families
Nvidia Corp. Chief Executive Officer Jensen Huang touted “insane” returns for investors willing to bet on the AI boom, seeking to dispel lingering concerns around the big sums spent on artificial intelligence and its long-term profitability.
The Nvidia co-founder, who’s spent much of the week at Computex proselytizing about how AI will revolutionize economies and society, found time Tuesday evening to address hundreds of representatives from financial institutions and wealthy family offices. A billionaire himself, Huang said only “crazy” people would question returns from AI, citing the trillions of dollars of value the technology’s created.
3. Technology
3.1
Bloomberg (06/04): Nvidia’s RTX Spark Sets Up Fight Over the Soul of Windows PCs
The future of the personal computer is a hot topic again, courtesy of Nvidia Corp.’s announcement this week with Microsoft Corp. The leader in AI hardware is taking another run at making the central component for laptops, promising to bring the biggest change to the devices in decades.
Nvidia’s RTX Spark Superchip announcement overshadowed everything else at a particularly busy edition of the Computex trade show in Taipei. It dinged the stock prices of Intel Corp. and Advanced Micro Devices Inc., lifted Nvidia partner MediaTek Inc., and set up a fascinating confrontation for this fall, when the first devices built with this technology go on sale.
The RTX Spark processor is the first in a line of new chips that Nvidia says will deliver the most optimized computers for artificial intelligence work — in the same way its products have become the backbone of AI data centers. The key difference compared with products from Intel and AMD is the ability to run large models on the device without reaching out to the internet.
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