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- Alphabet sold $20 billion in US bonds and is planning the sale of rare 100-year bonds in British pounds, plus debut Swiss franc bonds, to fund its AI ambitions.
- The company’s capital spending will reach up to $185 billion this year, double last year’s amount, as major tech firms issued $121 billion in bonds last year for AI infrastructure.
- Analysts predict cloud computing companies could borrow $400 billion in 2026, up from $165 billion in 2025, potentially driving total corporate bond issuance to $2.3 trillion.
Alphabet is leading the way in high corporate borrowing with an aim to get ahead in the AI race.
The company recently tapped into global bond markets, raising huge funds to support one of the biggest spending sprees in modern business history.
Alphabet’s Record-Breaking Debt Sale
Alphabet raised $20 billion by selling bonds in the US on Monday. Investor demand was huge, with orders topping $100 billion, making it one of the strongest corporate bond deals on record.
The IT giant also announced plans to sell a very rare bond that matures in 100 years, denominated in British pounds. The last time a company announced this bond was Motorola back in 1997. The deal offers bonds with maturities from 3 to 100 years, and pricing could happen as early as tomorrow. ⁽¹⁾
Additionally, Alphabet is selling bonds in Swiss francs for the first time, offering five different maturity options spanning 3 to 25 years. ⁽²⁾
AI Spending Drives Massive Borrowing
The reason behind this borrowing boom is simple. Artificial intelligence.
Alphabet announced that its capital spending will reach as much as $185 billion this year, double what it spent last year. This money will go toward expanding data centers and buying the powerful processors needed for AI development. ⁽³⁾
Alphabet is not alone. The five major AI companies, Amazon, Google, Meta, Microsoft, and Oracle, issued $121 billion in corporate bonds last year. Oracle recently sold $25 billion in notes, following previous major sales by Meta ($30 billion in October), Alphabet ($17.5 billion in November), and Amazon ($15 billion in November). ⁽⁴⁾
Market Projections Point to Record Year
Analysts predict 2026 will be a record-breaking year for corporate debt issuance. The six biggest US tech companies are on track to spend $500 billion this year, according to Moody’s Ratings.
Morgan Stanley estimates these cloud-computing companies, known as hyperscalers, could borrow $400 billion this year alone, up from $165 billion in 2025. This AI-related borrowing could drive total corporate bond issuance to as much as $2.3 trillion. ⁽⁵⁾
Barclays analysts expect overall US corporate bond issuance to reach $2.46 trillion this year, an increase of 11.8% from 2025. ⁽⁶⁾
Why the Rush?
The rapid pace of AI spending has already affected other parts of the market. Software company stocks recently dropped following the release of Claude by Anthropic, showing how quickly AI developments can reshape the technology landscape.
Rare Moves in Bond Markets
Alphabet’s goal to sell a bond that matures after a century is quite unusual. The market for bonds with a maturity of 100 years is typically used by governments and institutions like universities. For corporations, the risks of acquisitions, business model changes, and obsolete technologies are not practical commitments for issuing such bonds. ⁽⁷⁾
However, the massive funding needs for advanced AI development have made rare deals attractive. Strong demand from UK pension funds and other funds has made the British pound market especially appealing for companies seeking longer-term funding. ⁽⁸⁾
Looking Ahead
As tech companies continue to navigate through the AI race, the level of borrowing is expected to continue to break records.
The massive amount of debt being issued has started to raise concerns about bond valuations.
However, with strong investor demand demonstrated by the overwhelming response to Alphabet’s recent offerings, the market appears ready to support these historic funding needs.
