Alphabet has turned to the debt markets in a major way as it seeks to finance the extraordinary capital spending required for its artificial intelligence expansion.
The Google parent raised $20 billion on Monday in its largest-ever US dollar bond sale, exceeding the $15 billion initially expected after attracting one of the biggest order books on record, with more than $100 billion in investor demand.
The company is also preparing debut bond offerings in Switzerland and the United Kingdom, including plans for a rare 100-year bond—the first time a technology firm has attempted such a maturity since the late-1990s dotcom era.
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Alphabet’s borrowing comes days after other tech giants, including Meta and Amazon, signaled plans to sharply increase spending to keep pace in the AI race. The scale of these investments has raised concerns in credit markets about how the wave of debt issuance could affect corporate balance sheets.
Those concerns appeared muted on Monday as investors rushed into Alphabet’s deal, underscoring strong appetite for high-grade tech debt despite the surge in borrowing.
“Clearly we’re not in a typical capex cycle, and after previously being net savers, the companies involved are now going deep into the well for financing to secure the resources to compete,” said Andrew Dassori, chief investment officer at Wavelength Capital Management. “This is a major transition and a critical one when thinking about potential risk and return for corporate bonds in the US.”
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