Alphabet joins Silicon Valley’s AI bond issuance wave: plans to raise $3.5 billion to accelerate AI infrastructure investment.

```

Google’s parent company Alphabet is joining the growing ranks of Silicon Valley firms issuing bonds to fund its massive investments in artificial intelligence. The tech giant plans to return to the European bond market, issuing multiple tranches of bonds to raise at least 3 billion euros (about $3.5 billion), highlighting how the AI arms race is driving industry leaders to seek external financing at unprecedented scales.

According to media citing a source familiar with the matter, Alphabet is marketing six tranches of euro-denominated benchmark bonds in the European market, with maturities ranging from three to thirty-nine years. This is Alphabet’s second foray into the euro bond market in 2025.

This bond issuance comes at a time when demand for Alphabet’s cloud services and AI business is surging. The company’s latest financial report shows third-quarter sales rising to $87.5 billion, with revenue from products powered by generative AI models more than doubling year-on-year. To meet business growth, Alphabet is making record capital expenditures, with annual totals expected to reach $91 to $93 billion.

Alphabet’s move reflects the financing boom in the tech industry to support AI development. According to a previous WallstreetCN article, Oracle’s data center has launched “the largest AI infrastructure financing”, reaching $38 billion. This will be the largest financing deal ever for AI infrastructure. Meta also plans to issue $25 billion in bonds to support its AI strategy. The massive capital required to build next-generation AI infrastructure is driving tech giants to actively tap into the debt market.

Planning to raise $3.5 billion, Alphabet accelerates AI infrastructure investment

To stay ahead in the intense competition in AI, Alphabet is committing record capital. The company expects this year’s capital expenditure to be between $91 billion and $93 billion, with investments mainly going toward building AI and cloud infrastructure.

Strong performance growth underpins this massive investment plan. In the last quarter, the company’s financial report showed sales reaching $87.5 billion, with revenue from Google generative AI model products more than tripling year-on-year. According to media citing sources, the bond proceeds will be used for general corporate purposes, which closely aligns with supporting its capital spending plans.

According to people familiar with the deal, Alphabet’s bonds this time come in six tranches, covering short-, mid-, and long-term maturities from three to thirty-nine years. In initial pricing guidance, the three-year bonds are set to be issued at approximately the mid-swap rate plus 60 basis points, while the longest, thirty-nine-year bonds are at the mid-swap rate plus 190 basis points.

Analysts say Alphabet’s strong credit ratings of Aa2/AA+ allow it to secure favorable financing conditions in the bond market.

Earlier this year, Alphabet successfully issued 6.75 billion euros in the European market for the first time, which was enthusiastically received by the market. This return further demonstrates its global strategy in sourcing funds. The joint global coordinators and joint bookrunners for this issue include Goldman Sachs, HSBC, and JPMorgan, while BNP Paribas, Crédit Agricole CIB, and Deutsche Bank also serve as joint bookrunners. Final pricing is expected later today.

AI capital demand surges as tech giants flock to the bond market

Alphabet is not the only tech company issuing bonds for AI expansion. As industry demand for computing power and data centers continues to rise, tech giants are collectively turning to the bond market for funding. For example, Meta last week appointed Citigroup and Morgan Stanley to prepare a $25 billion bond offering with maturities ranging from 5 to 40 years. This largest corporate bond issue of the year is already impacting the broader market. According to media analysis, Meta’s massive bond plan has reopened the corporate bond supply floodgates and is one of the factors pushing up U.S. Treasury yields.

Recently, Oracle’s data center also launched “the largest AI infrastructure financing,” totaling $38 billion. This will be the largest AI infrastructure financing deal to date. This financing will fund two projects developed by Vantage Data Centers, which will ultimately be used by Oracle to support OpenAI’s computing needs, as part of the $500 billion Stargate AI infrastructure investment initiative jointly advanced by Oracle and OpenAI.

Risk Advisory and DisclaimerThe market involves risks and investment should be cautious. This article does not constitute personal investment advice and does not take into account the particular investment objectives, financial situation, or needs of any individual user. Users should consider whether any opinions, views, or conclusions in this article suit their particular circumstances. Investment decisions made accordingly are at your own risk. ```