Alphabet Raises $20 Billion in Record Bond Sale to Fund AI Expansion
Alphabet Inc. has launched an aggressive global borrowing drive to fund its artificial intelligence ambitions. As a result, investors have poured money into its latest offerings. On Monday, the Google parent raised $20 billion in its largest-ever US dollar bond sale. Initially, the company had expected to raise $15 billion. However, demand surged and produced one of the biggest order books on record.
At the same time, Alphabet is preparing debut bond deals in Switzerland and the UK. Notably, the company plans to issue a rare 100-year bond. This move marks the first attempt by a tech firm to sell such long-dated debt since the late 1990s dotcom era.
Meanwhile, other technology giants have also increased spending to accelerate their AI strategies. Consequently, concerns have grown that heavy borrowing could strain credit markets. Nevertheless, investors brushed aside those fears, as Alphabet’s bond sale attracted more than $100 billion in orders.
Spending Surge Reshapes Credit Markets
Alphabet recently outlined plans for up to $185 billion in capital expenditures this year. In comparison, that figure exceeds its total spending over the previous three years combined. The company is channeling much of the investment into data centers that power AI systems. Furthermore, it said those investments are already lifting revenue as AI tools drive more online search activity.
As hyperscalers ramp up outlays, overall capital spending among the four largest US tech companies could reach about $650 billion in 2026. Therefore, borrowing needs across the sector continue to climb. Morgan Stanley expects hyperscalers to raise $400 billion this year, up from $165 billion in 2025. In turn, analysts project total high-grade debt issuance could hit a record $2.25 trillion.
Although strategists warn that massive supply may widen corporate bond spreads, markets continue to absorb new issuance. Accordingly, credit conditions remain stable despite the surge in fundraising activity.
Deal Structure and Market Context
Alphabet structured its US dollar offering in seven parts, according to people with direct knowledge of the matter. The longest tranche, maturing in 2066, priced at a yield 0.95 percentage point above Treasuries. Earlier discussions had indicated a premium closer to 1.2 percentage points.
Recently, Oracle Corp. raised $25 billion in a bond deal that drew record demand. Similarly, Alphabet tapped the US bond market in November, raising $17.5 billion after attracting about $90 billion in orders. At that time, it also issued a 50-year note and sold €6.5 billion of bonds in Europe.
Looking ahead, Bloomberg Intelligence estimates that cumulative spending on artificial intelligence, cloud infrastructure and data centers could reach $3 trillion by 2029. Accordingly, global bond markets may continue to play a central role in financing the AI expansion.
