Alphabet, Google's parent company, plans to raise about $15 billion through a U.S. dollar bond issuance.

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As the race to invest in artificial intelligence intensifies, Alphabet is returning to the high-grade U.S. bond market, becoming the latest entrant in the current borrowing frenzy led by tech giants.

According to sources cited by Bloomberg, Google’s parent company Alphabet’s bond issuance will be divided into up to seven tranches. The longest-term bond, maturing in 2066, initially offers a yield about 1.2 percentage points above U.S. Treasuries. This move marks Alphabet’s second substantial fundraising in less than four months, further strengthening its reserves for massive capital needed to build AI infrastructure.

The issuance comes as so-called “hyperscale cloud providers” ramp up capital spending. This group of companies is expected to invest more than $650 billion this year in expanding AI infrastructure. Since last year, they have released large volumes of debt to the market. While investors are still actively buying, concerns about possible bubbles stemming from excessive AI spending are on the rise.

This trend has become especially evident lately. Just last week, Oracle raised $25 billion through a bond sale, attracting a record $129 billion in orders at peak subscription, underscoring strong market demand for tech giant bonds.

Capital spending surges above expectations

Alphabet's fundraising is closely tied to its aggressive capital spending plans. The company announced last week that it expects to spend as much as $185 billion this year, a figure far exceeding previous market forecasts.

This massive funding demand stems from ongoing investments in artificial intelligence, cloud infrastructure, and data centers. According to Bloomberg Industry Research estimates, total capital spending in this area is projected to reach $3 trillion by 2029.

Despite the enormous expenditures, Alphabet's financial performance remains robust. Its latest fourth-quarter earnings report shows the company exceeded the average analyst forecast compiled by Bloomberg.

Global financing layout and long-term bonds

Beyond the U.S. dollar bond market, Alphabet is actively expanding its global financing channels. According to Bloomberg sources, in addition to this dollar bond issuance, the company has appointed banks to arrange potential Swiss franc and British pound debt offerings, including a rare 100-year bond.

This isn’t Alphabet’s first large-scale fundraising in recent times. Last November, the tech giant raised $17.5 billion in the U.S. bond market, attracting about $90 billion in orders. During the same period, it also issued €6.5 billion in notes in Europe.

Against the backdrop of an escalating AI arms race, tech giants locking in long-term low-cost capital through the bond market has become routine. Although Oracle and others' massive fundraising is being eagerly pursued by the market, the pricing and subscription status of Alphabet’s issuance will serve as yet another indicator of investors’ appetite for continued heavy spending in the tech industry.

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