Alphabet is turning to the debt market to help fund its massive push into artificial intelligence, as investor demand for tech bonds continues to surge.
According to industry reports, Alphabet is planning a US dollar bond sale of around $15 billion across as many as 7 tranches. The offering has already attracted more than $100 billion in investor orders, highlighting a strong appetite for high-grade debt from large technology companies, the report adds.
The bond sale comes at a time when major cloud and AI players are sharply increasing spending on infrastructure. Analysts expect AI-focused hyperscalers to invest over $630 billion globally this year, even as returns from those investments take time to catch up.
Alphabet recently said its capital expenditure could reach up to $185 billion in 2026, more than double previous levels.
Larger commitments to data centres
In another report, Alphabet acknowledged new risks tied to its heavy AI spending. In its latest financial filing, the company warned that large commitments to data centres, leased compute capacity, and long-term infrastructure contracts could lead to higher costs, operational complexity, or even excess capacity if demand shifts.
To support these investments, Alphabet may now be targeting a larger bond raise of up to $20 billion, potentially including long-dated bonds. One planned tranche could even extend to 100 years, according to people familiar with the matter. The deal is said to be multiple times oversubscribed, reflecting strong investor confidence.
Alphabet’s long-term debt has grown rapidly, reaching $46.5 billion after the company completed a $25 billion bond sale in November, adds the report.
CEO Sundar Pichai said the biggest challenge facing the company is securing enough compute capacity, including power, land, and supply chains, to meet rising AI demand.
At the centre of Alphabet’s strategy is Gemini, its flagship AI model and assistant, which now has more than 750 million monthly active users, up from 650 million in the previous quarter.
