$20 billion isn't enough! Alphabet issues Swiss franc bonds for the first time, borrowing worldwide for its $185 billion AI ambitions

Alphabet is launching an unprecedented financing offensive in global markets. After completing a record-breaking $20 billion USD bond issuance, Google’s parent company swiftly turned to the European market, debuting its first Swiss franc-denominated bonds and offering a rare century-long British pound bond to meet its massive $185 billion AI infrastructure investment needs.

According to Bloomberg, on Tuesday Alphabet began selling Swiss franc-denominated bonds with five maturities: 3, 6, 10, 15, and 25 years, with pricing expected to be completed that day. This marks the company’s first entry into the Swiss franc bond market, signaling further expansion of its financing landscape.

The company also plans to issue its first pound-denominated bonds with maturities of 3, 6, 15, 32, and 100 years. Bloomberg compiled data showing this will be the first time since Motorola in 1997 that a technology company has issued bonds with such extreme maturities.

For corporate issuers, 100-year bonds are extremely rare due to uncertainties like technological obsolescence, mergers and acquisitions, and outdated business models. This market is usually dominated by governments and universities.

The direct backdrop for this global bond issuance frenzy is Alphabet’s record-setting capital expenditure plan announced last week. The company’s capital spending this year will reach up to $185 billion, double last year’s amount and more than the total of the previous three years, primarily directed at building AI infrastructure.

USD Bonds Attract $100 Billion in Orders

Alphabet’s $20 billion seven-tranche USD bond issuance, completed Monday, surpassed the original $15 billion target, attracting peak subscription orders of over $100 billion, making it one of the most in-demand corporate bond issuances ever.

Strong market demand pushed pricing significantly lower. The shortest three-year bond was priced at a premium of just 0.27 percentage points over U.S. Treasuries—well below the initial discussion of 0.6 percentage points. The longest 40-year bond’s premium narrowed from the initial 1.2 percentage points to 0.95.

BofA, Goldman Sachs, and JPMorgan acted as lead underwriters for these multi-currency bond offerings, with Deutsche Bank, RBC, and Wells Fargo also participating in the USD bond management.

Tech Giants Trigger a Financing Frenzy

Alphabet’s move is part of a broader financing trend in the technology sector. According to BofA Securities data, the five major AI cloud computing giants—Amazon, Google, Meta, Microsoft, and Oracle—issued $121 billion in U.S. corporate bonds last year, compared to an average annual issuance of just $28 billion from 2020 to 2024.

Morgan Stanley expects cloud computing giants’ borrowing to soar from $165 billion in 2025 to $400 billion this year. The issuance wave is expected to push overall investment-grade bond issuance to a record $2.25 trillion this year.

Last week, Oracle issued $25 billion in bonds, attracting a record $129 billion in peak orders. In October last year, Meta raised $30 billion, setting the record for a single non-M&A investment-grade bond issuance. Bloomberg Industry Research estimates that by 2029, total capital expenditures for AI, cloud infrastructure, and data centers will reach $3 trillion.

Spread Pressure Raises Warning

This issuance frenzy is starting to raise concerns about bond valuation pressure. Vishwas Patkar, Morgan Stanley’s U.S. credit strategist, and Nathaniel Rosenbaum from JPMorgan both expect the huge scale of issuance will widen corporate bond spreads.

Patkar noted the current situation is similar to 1997-98 or 2005: “Credit performance is weak, but it’s not ‘end of cycle.’” According to Barclays, while pent-up merger demand and refinancing of existing corporate debt will boost overall issuance this year, the biggest driver will be financing for AI-related investments.

In recent years, global companies have turned to the Swiss franc bond market for diversification in debt financing. In 2025, U.S. companies including Thermo Fisher Scientific and Caterpillar have already issued franc-denominated bonds. The average extra yield investors require to hold investment-grade corporate bonds versus U.S. Treasuries is now at its lowest point in decades.

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