Alphabet selling very rare 100-year bonds to help fund AI investment
Tony Trzcinka, a U.S.-based senior portfolio manager at Impax Asset Management, which bought Alphabet’s bonds last year, said he skipped Monday’s offering because of insufficient returns and concerns about overexposure to companies with complex financial obligations related to AI investments.
“It wasn’t worth changing,” Trzcinka said. “We are very conscious of our exposure to these hyperscalers and their capital budgets.”
Big tech companies and their suppliers are expected to invest nearly $700 billion in AI infrastructure this year and are increasingly turning to debt markets to finance the construction of giant data centers.
In November, Alphabet sold $17.5 billion worth of bonds in the United States, including a 50-year bond – the longest dollar bond sold by a technology group last year – and raised 6.5 billion euros in European markets.
Oracle raised $25 billion last week through a bond sale that generated more than $125 billion in orders.
Alphabet, Amazon and Meta all increased their capital spending plans in their latest earnings reports, raising questions about whether they will be able to finance this unprecedented spending spree from their cash flow alone.
Last week, Google’s parent company reported annual revenue topping $400 billion for the first time, beating investors’ expectations for revenue and profit in the most recent quarter. It said it plans to spend up to $185 billion in investments this year, about double last year’s total, to capitalize on growing demand for its Gemini AI assistant.
Alphabet’s long-term debt soared to $46.5 billion in 2025, more than four times the previous year, even though it held cash and equivalents of $126.8 billion at the end of the year.
Investor demand was strongest on the shortest part of Monday’s deal, with the three-year offer price just 0.27 percentage points above the U.S. Treasury’s, compared with 0.6 percentage points during initial price discussions, people familiar with the matter said.
The longest part of the offering, a 40-year bond, is expected to yield 0.95 percentage points over U.S. Treasuries, up from 1.2 percentage points in initial negotiations, the sources said.
Bank of America, Goldman Sachs and JPMorgan are the bookrunners for the bond sales in three currencies. All three declined to comment or did not immediately respond to requests for comment.
Alphabet did not immediately respond to a request for comment.
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