Google-parent company Alphabet raised $20 billion in its largest bond sale ever on Monday, and plans to issue a rare 100-year bond in the U.K., as the AI arms race pushes the tech giant to borrow money.
Alphabet tapped the debt market just days after announcing that it planned to
spend up to $185 billion in capital expenditures this year to build the infrastructure that powers its AI services. Rivals including Meta, Amazon, and Microsoft have all vowed to spend similarly vast sums this year. While the giants of Big Tech once had more cash on their balance sheets than they knew what to do with, the cost of building AI data centers is now so extreme that companies like Alphabet are being forced to borrow cash.
To judge by Monday's bond sale, the market seems more than willing to extend credit. Alphabet had initially aimed to raise $15 billion in the U.S. bond sale, but ended up raising $20 billion,
Bloomberg reported.
As for the so-called century bond, which matures over 100 years and will reportedly be denominated in British sterling, it's an unusual move for a tech company. Century bonds are typically the province of governments and universities. In fact, a tech company hasn't issued a 100-year bond since the days of the dotcom boom, when Motorola did so in 1997. Interpret that however you will.—
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