Alphabet upsizes historic equity raise to USD85b

Good morning. Here’s what happened overnight and what you need to know today.

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1.

Google upsized: Alphabet upsized its record equity raising to USD84.75 billion ($118.8 billion), about USD5 billion more than targeted, after strong demand from more than 75 investors, the Google parent said in a filing. The sale is Alphabet’s first stock offering in more than two decades and will be the largest on record, surpassing Petrobras’s USD70 billion stock sale in 2010. After strong demand, Alphabet increased the size of an offering of common and convertible share sales to USD35 billion from USD30 billion, with Goldman Sachs, JPMorgan Chase and Morgan Stanley underwriting the deal. Another USD40 billion will be sold directly into the market over time, while a USD10 billion private placement to Berkshire Hathaway remains unchanged. Nearly 40% of the proceeds will cover tax obligations tied to employee equity awards, a hidden cost of the AI talent war that is roughly double last year’s total, The Information reported. Google plans USD190 billion of capital expenditure this year on AI, with that figure expected to “significantly” increase in 2027. The success of the deal has stoked speculation that Big Tech rivals will follow suit, Reuters reported. (Capital Brief)(SEC filing)(Reuters)(FT)

2.

Tariff threat: The Trump administration proposed imposing a 12.5% tariff on Australia after an official investigation found it had failed to stop goods made with forced labour from entering its markets. The Office of the US Trade Representative, which finalised its investigation on Wednesday, alleged Australia’s policies had failed to effectively enforce a ban on slavery, making it harder for American businesses to compete fairly. Australia already faces a 10% tariff on goods exported to the United States, though that measure is due to expire in July, making the proposed 12.5% levy its likely successor. The tariff is not yet in force, with the Trump administration seeking public submissions and holding hearings before deciding whether to proceed. A government source speaking on condition of anonymity told The Australian Financial Review it was unclear whether the 12.5% levy would apply to products where Australia had previously been granted an exemption, including beef and gold. A spokesman for Trade Minister Don Farrell said Australia maintained that any tariffs on its exports to the US were inconsistent with the two countries’ free trade agreement. “Australia has robust, comprehensive and world-leading legislation addressing forced labour and modern slavery,” the spokesman said. Brazil, China, India, Japan, New Zealand and South Korea are among the 54 countries facing the same proposed levy. (Capital Brief)(AFR)

3.

Gulf erupts: Iran launched its largest barrage of the near two-month ceasefire on Wednesday, firing ballistic missiles and drones at Kuwait and Bahrain as the tenuous truce between Washington and Tehran came under its most severe strain since April. One person (an Indian national) was killed and 63 others injured when Iranian drones and missiles struck Terminal 1 of Kuwait International Airport at dawn, leaving the building ablaze with a gaping hole in its roof, Kuwaiti authorities said. According to reports, the fighting erupted on Tuesday local time after a US aircraft fired a Hellfire missile into the engine room of the Botswana-flagged tanker Lexi, which had ignored warnings while attempting to breach the US blockade and reach Iran’s Kharg Island oil terminal. Iran then launched attack drones at civilian mariners transiting the Persian Gulf, which the US shot down, before conducting what it said were self-defence strikes on an Iranian military ground control station on Qeshm Island. Iran said its subsequent missile and drone barrage on Kuwait and Bahrain, which host US military bases, was retaliation for the Qeshm strike and the Hellfire attack on the tanker. Iran’s Islamic Revolutionary Guards Corps said it had targeted the US Fifth Fleet headquarters in Bahrain; Centcom denied any US facility had been hit. (NYT)(FT)(WSJ)(Reuters)(AP)

4.

Markets react: Wall Street snapped its winning streak as fresh US-Iran clashes again drove oil prices toward USD100 a barrel, stoked inflation fears and raised the prospect of Federal Reserve rate hikes. The Dow was 0.98% lower in late afternoon trading in New York at the time of writing. The S&P 500 was 0.54% lower and the Nasdaq down 0.73%. Brent crude rose 2.6% to USD98.48 a barrel and West Texas Intermediate gained 2.4% to USD96.05. The Fed’s Beige Book said energy-related costs tied to the Middle East conflict were “the primary driver of inflationary pressures, with spillovers into shipping, packaging, groceries and fertilizer.” Private businesses added 122,000 jobs in May, above the 110,000 economists had expected, ADP said, with the strong numbers feeding bets the Fed’s next move will be a rate increase. Financial markets are now pricing in a 41.8% likelihood of a Fed rate hike at the December meeting, up from 9.1% a month ago, according to CME’s FedWatch tool. Meanwhile, US Treasury secretary Scott Bessent told a Senate finance committee hearing the inflation surge would prove a “short-term blip". Financial stocks led losses, falling almost 2%, after Switzerland’s Partners Group capped withdrawals on an USD8.6 billion private equity fund, sparking a broader selloff in asset managers including KKR, Blackstone and Blue Owl. (WSJ)(Bloomberg)(Reuters)(FT)

5.

Bibi’s crazy: US President Donald Trump confirmed he called Israeli Prime Minister Benjamin Netanyahu “crazy” in an expletive-filled phone call over Lebanon, telling a podcast he was “a little bit perturbed at his constantly fighting with Lebanon.” According to an Axios report citing a US official Trump told Netanyahu: “You’re fu****g crazy. You’d be in prison if it weren’t for me. I’m saving your ass. Everybody hates you now. Everybody hates Israel because of this.” Netanyahu declined to detail the conversation, telling CNBC “I’m not going to get into details,” but adding the two leaders have “common goals” and “always find a way to work out our differences” as “great friends.” The rift comes as Iran has said it will not agree to end the war unless a ceasefire also covers Lebanon, while Israel has continued striking Hezbollah targets in the south despite a US-mediated agreement announced Monday under which Netanyahu stepped back from attacking Beirut and Hezbollah pledged to halt cross-border strikes. That agreement is already fraying. Hezbollah fired rockets at Israeli troop positions in northern Israel on Wednesday, Reuters reported, while Israeli drone strikes killed six people near Tyre and hit a car on the coastal highway south of Beirut, in the closest strike to the capital since Trump intervened. (NYT)(Axios)(CNBC)(Reuters)

6.

Mythos limbo: Anthropic opened its most powerful AI model, Mythos, to Australia, but none of the nearly 40 companies and government agencies contacted by Capital Brief would confirm they had received access. One day after filing paperwork for a blockbuster IPO, Anthropic extended Mythos to 150 organisations worldwide, including in Australia, having previously limited it to a handful of American firms under its Project Glasswing program. But Capital Brief confirmed none of the big four banks had been granted entry, and Transgrid, Macquarie Technology Group, Medibank and InfoTrack all confirmed they had not. “Access is tightly scoped to organisations defending critical infrastructure, or those that build or operate systems across core sectors (power, water, healthcare, communications, financial services), as well as national security organisations,” an Anthropic spokesperson said. The AI lab declined to name any participants. Meanwhile, CBA and Westpac are using OpenAI’s equivalent cyber platform Daybreak, underpinned by its GPT-5.5 model. (Capital Brief)

7.

IPO history: Anthropic picked Morgan Stanley and Goldman Sachs to lead its IPO, with JPMorgan Chase also on the deal, according to Bloomberg. The AI lab, valued at USD965 billion ($1.35 trillion) after its latest funding round is weighing going public as soon as possibly October, the publication added. The appointments come as SpaceX prepares to kick off its own roadshow on Thursday, targeting a fixed IPO price of USD135 per share to raise a record USD75 billion at a USD1.75 trillion valuation. Reuters reported SpaceX plans to sell 555.6 million shares in an all-primary offering, with Musk required to hold his shares for 366 days after the IPO. Jefferies, conspicuously absent from SpaceX’s syndicate of roughly two dozen banks, is reportedly fielding requests from hedge funds to arrange bets against SpaceX’s shares once they begin trading, according to Bloomberg. The news outlet also reported ten Trump administration officials, including special envoy Steve Witkoff, reported financial interests in SpaceX or xAI worth up to USD43.8 million in their most recent public disclosures. That, as SpaceX recorded USD4 billion in federal transactions in fiscal 2025 and was awarded a further USD6.5 billion in Space Force contracts last month. The disclosures also follow Musk using his time running DOGE to install dozens of his own employees across federal agencies, according to the report. Ethics lawyers told Bloomberg the situation has “no analogs” in recent history. (Bloomberg)(Reuters)

8.

Left field: Citron Research founder Andrew Left’s fraud conviction has raised questions about where the line sits between public commentary and illegal trading, shining a light on what one hedge fund manager called “murky” regulation around publicly touting positions. Left was found guilty this week following a 15-day Los Angeles trial, with prosecutors saying Left used his public commentary to manipulate share prices, taking positions in stocks, posting about them on X, then quickly exiting at a profit when prices moved in his favour. The case has put a spotlight on a grey area of financial markets, raising questions about what an investor is obliged to disclose about their trading and how long they must hold a position after publicly stating their opinion on a stock. “What the SEC and the justice department have a really big problem with is implying you’re doing one thing while you’re doing another,” legendary short seller Jim Chanos told The Financial Times. “That’s where you begin to cross lines that get you into legal trouble.” Left’s legal team said the jury got it wrong and that no one lost a dollar because of his commentary. The verdict has sent a shiver through an industry already battered by the stock market’s relentless rise and an onslaught of regulatory scrutiny since late 2021. Left will be sentenced in August. (FT)

9.

Lung game: 4DMedical founder and CEO Andreas Fouras has had a big couple of days. On Monday, he announced his medical imaging software company had expanded to Europe “over the weekend". Then, just 24 hours later, he unveiled a new clinical evidence program with the potential to grow the company’s target opportunity five-fold — the latest in a relentless drumbeat of contract wins and regulatory clearances that have sent the stock up more than 1000% over the past year. The $2 billion ASX company acquired Austrian medtech Contextflow to underpin the European move, in a deal comprising an upfront payment of $18.56 million in cash and 56,235 shares, plus an earnout of up to 2.59 million zero exercise price options over two years. Fouras told Capital Brief the deal grew 4DMedical’s market opportunity by 50% for 6.5% of its existing cash balance, and less than half a percent of dilution to shareholders. The new clinical evidence program is designed to fast-track use of its flagship lung imaging software, CT:VQ, for pulmonary embolisms, increasing the US opportunity from roughly 1 million scans per year to around 5 million. “Pretty much every customer we talk to asks us about helping them with this problem,” Fouras said. “We’ve been positively surprised by the pull factor from our customers.” (Capital Brief)