and alphabet Google CEO Sundar Pichai said the company is poised to potentially earn more than $100 billion on Elon Musk’s 2015 bet on SpaceX, saying the explosion in artificial intelligence has opened the door to more startup investments.
“You know with SpaceX and Anthropic and others, we think the move to AI creates more opportunities to deploy capital in a good way, and that’s what we’re doing,” Pichai said in a conversation with Stripe co-founder John Collison posted Tuesday.
Google has been in the startup investment game for years through its early-stage venture group GV and growth arm CapitalG. But today’s AI companies require checks in the hundreds of millions or even billions of dollars, and Google’s parent company Alphabet is joining other tech giants such as: Nvidia, microsoft and Amazon This means avoiding the venture route and moving away from the balance sheet.
Alphabet first invested in SpaceX in 2015, putting in $900 million at a valuation of about $12 billion. In February, SpaceX merged with Musk’s xAI in a deal worth $1.25 trillion. Assuming Alphabet owns all of its shares, its stock is currently worth about $100 billion and could rise in value in the coming months.
Last week, SpaceX secretly filed for an IPO, and the company is reportedly seeking a record $1.75 trillion valuation.
Next, OpenAI’s rival Anthropic competes with Google in the AI model layer, but it also partners with search companies, pledging to buy billions of dollars worth of tensor processing units (TPUs) and cloud infrastructure.
In 2023, Google invested $300 million in AI Labs, taking a roughly 10% stake. A few months later, another $2 billion poured in. Since then, Anthropic’s valuation has soared from a multi-billion dollar valuation to $380 billion as of its last round in February, with Google also injecting additional capital in the process.
Google’s total investment in Anthropic currently totals over $3 billion, with Google reportedly holding a 14% stake in the company.
Pichai’s latest comments suggest that Google may be considering additional outside investments as it racks up AI profits. He added that the company wants to be “a good steward of capital.”
“As long as you’re bullish about ROIC, you want to put every last dollar you can into it,” he said, referring to return on invested capital.
In speaking with Collison about investing, Pichai shared his thoughts with the leaders of portfolio companies.
Stripe’s valuation was $159 billion as of February, an increase of more than 17x since GV participated in a $150 million round in 2016. CapitalG is also an investor in this fintech company.
“We felt that our investment in Stripe was good stewardship of our capital,” Pichai told Collison.
Pichai also talked about Waymo, Alphabet’s self-driving car division. Waymo raised its first round of external investment in 2020, raising $2.25 billion. Earlier this year, Waymo raised a $16 billion funding round, with Alphabet providing funding along with a number of outside investors, valuing the company at $126 billion.
When Waymo was first raising money, Alphabet didn’t have the kind of money at its disposal today.
“I wish we could have invested more capital into Waymo earlier, but we just weren’t mature enough to do that,” Pichai said.
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