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.

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.

who cares about marketing when you have distribution? Probably a smart move to pump dollars into the product and not the marketing.

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

Is it? My mom and all her friends use "the intelligence". What is it? Gemini, because it's on their android phone.

Do they even do logging in the traditional sense? Surely they have some bespoke googly solution.

Turning all of those annoyingly verbose and long YouTube videos into text that could be searched, summarized and referenced easily would be amazing

Really? Every business owner I know outside of HN wants to be discoverable by LLMs.

"Buy low, sell high" isn't exactly financial manipulation.

You’d think Berkshire would be at least passingly aware of that principle, though.

> 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?)

> We are talking probably ~150 trillion.

Yes, but we are talking about liquidity not valuations...

First-order, yes.

In practice there's a lot of issues with asymmetric information. The company knows its own operations and financial position better than random traders on Wall Street. It is rational for it to buy back stock when the market value is lower than the true intrinsic value of the company, and to sell stock when the market value is higher than the true intrinsic value of the company. Therefore, traders often treat buybacks as a signal that the company is "cheap" (at least in the company's own view) and pump up the price accordingly, and treat stock issuances as a sign that company management believes that the stock is "expensive" and push it down accordingly. Company management has more inside information than market participants do, but is usually prohibited from trading on it. Stock issuances and stock buybacks are one of the few cases where insider-initiated trading is legal, because the benefits accrue to the company as a whole rather than a few individuals.

But stock buybacks shouldn't be price-neutral by default? The entire point is to increase the unit price of the remaining shares.

And in this specific case, selling shares to Berkshire at a 5% discount has a pretty clear signalling effect.

Don't forget that the denominator (total number of outstanding shares) will be increased by this as well. So even if the market cap reacted exactly one to one like you're proposing the per share price wouldn't stay constant necessarily.

Ok but GOOG also has a ~$70B per year stock buyback program for that. It's a little goofy to be buying back and issuing $80B of new shares at the same time.

Supply and demand of Google equity. The fundamental value of a share doesn't change, but you now need more investor capacity to hold the equity. So you need to sell to investors who weren't quite willing to pay the previous price.

It's not based on the fundamental value of the stock so maybe you wouldn't consider it "first order," but I think you can still call it "mechanical."

Maybe the market price drop has less to do with dilution, and more to do with suspending share buybacks for a while.

This is true in a "yes but" sense. Typically equities of the mega caps benefitted from debt issuance on the expectation it would accelerate growth. The change to equity value loss is what is interesting: the market no longer sees this as generating growth, at least not like it used to.

Both of these tell the actual market position:

1. There’s real profit/value expected in pursuing the full automation of the labor market to the extent that the Board will approve large debts to known allies (BH) who only invest in long term infrastructure.

So they are investing in more AI infrastructure with long term capital because they see the payoff in the long term.

2. That also means they aren’t doing market moving plays in public like selling corporate debt because they don’t want to be in the short term froth with a long term bet.

More money for less stock, because Google’s stock has gone up in price. By contrast, a stock buyback makes sense when the stock is cheap.

So I guess Google doesn’t think their stock is particularly cheap, but Berkshire Hathaway wants to buy more anyway. (At a slight discount.)

Capital is cheap for Google because they are making a lot of money and they have very little debt.

They are considered a very low risk and can borrow for a long time at low rates. They recently issued a 100 year bond.

They seem to have decided to issue equity rather than borrow more. This is probably so that they can maintain the ability to borrow very cheaply in future if necessary.

Also I don’t think any of these companies has handled big capex programs in the past (maybe AWS a bit since Amazon is building things, but it did so incrementally), aka they don’t have the institutional knowledge to manage the risk associated with it.

Semiconductor/ Big Oil/ Rail/ Telco have.

The market can stay irrational longer than you can stay solvent or whatever.