Alphabet is issuing a rare 100-year bond as part of a massive borrowing campaign to finance its artificial intelligence expansion, according to Bloomberg reports this week. The Google parent company is raising tens of billions of dollars through debt offerings in multiple currencies, marking one of the most significant corporate bond sales in the tech sector. The century bond attracted strong investor demand, signaling continued confidence in the company’s long-term prospects despite concerns about AI investment risks.
The company has already secured $20 billion from US investors in a heavily oversubscribed offering. Additionally, Alphabet is seeking at least $7.5 billion in UK sterling and $3.6 billion in Swiss francs, according to market reports. The pound-denominated portion of the deal drew particularly strong interest, with the £1 billion slice attracting £9.5 billion worth of bids from investors.
AI Spending Drives Google Bond Issuance
Alphabet expects to spend at least $175 billion on its AI buildout in 2026, making it the second-largest spender among mega-cap technology companies after Amazon’s $200 billion commitment. The Google bond issuance comes as the company accelerates its investment in artificial intelligence infrastructure and capabilities. Equity investors have largely supported these capital expenditure plans, with Alphabet stock rising 68% over the past year.
Bond investors are now demonstrating similar confidence in the company’s strategy. The dollar bond offering in the US on Monday drew record demand from investors, Bloomberg reported. This overwhelming response suggests that institutional investors remain comfortable lending to technology giants pursuing AI development despite broader market uncertainties.
Century Bonds Signal Investor Confidence
The issuance of 100-year bonds represents an unusual move in corporate debt markets. Such long-dated securities are more commonly seen in sovereign bond markets, where governments issue debt with extended maturities. However, the last time tech firms issued century bonds was during the 1990s dot-com era, when companies like Motorola and IBM sold similar instruments.
Alphabet’s bonds carry high credit ratings from major rating agencies, with Moody’s assigning an Aa2 rating and S&P Global providing an AA+ stamp. These ratings reflect the company’s strong financial position and ability to service its debt obligations over the long term. The high ratings help explain the robust investor appetite for the offerings across different maturities.
Tech Sector Borrowing Spree Continues
Meanwhile, Alphabet’s borrowing spree is part of a broader trend among mega-cap technology companies. Meta Platforms and Amazon have also recently completed their own bond sales to fund their respective AI initiatives. This wave of debt issuance has prompted some market observers to express concern about potential risks if investor sentiment shifts.
In contrast to these worries, current market conditions show no signs of weakening demand for technology sector debt. The strong reception of Alphabet’s bond offerings suggests investors remain willing to provide capital to leading tech firms pursuing artificial intelligence opportunities. The company’s ability to access debt markets at favorable terms reflects its market position and investor confidence in its AI strategy.
Implications for AI Investment Landscape
The successful bond sale demonstrates that major technology companies can continue accessing capital markets to fund their AI ambitions. However, some commentators have raised questions about whether debt financing for AI could pose risks if market conditions deteriorate and investor appetite wanes. The current strong demand suggests these concerns have not yet materialized in actual lending behavior.
Ford issued a hundred-year bond in 2021, but corporate century bonds remain uncommon outside of exceptional circumstances. Alphabet’s decision to include such long-dated debt in its offering mix indicates management’s confidence in the company’s durability and the value of its AI investments over the coming decades.
The outcome of Alphabet’s additional bond sales in UK sterling and Swiss francs will provide further indication of global investor appetite for technology sector debt. Market participants will continue monitoring whether demand remains robust as more tech companies potentially follow suit with their own AI-focused borrowing programs in the coming months.
