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> There are many reasons why a conglomerate like Alphabet doesn't want to hold all of that directly on the balance sheet

Can you tell us those reasons? I think this is basically _the_ question.

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"Tech" was incredible light on CapExp compared with everything else (until AI hit, that is). That is what allowed its explosive growth. On the one hand alphabet is not used to that. On the other hand it is turning into a more normal business with more CapExp, and like other more "normal" business it uses more external investment. As a general rule of thumb: The more capex, the more leverage; for example commodity extraction, infrastructure or power generation are very capex heavy, and heavily leveraged.

Right but thats usually debt, not equity financing.

I disagree with their reasoning and would say it's more for strategic benefits.

Giving firms that they get along well with (like Sequoia) allocation feels like a mix between a favor and possibly a way to signal that the valuation has some external buy-in too.

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