Key Points:
- Alphabet plans to raise $15 billion by selling new bonds.
- The funds will help pay for expensive AI infrastructure.
- Major tech firms borrowed $121 billion last year for AI projects.
- The longest bond in this new deal matures in 2066.
Google’s parent company, Alphabet, plans to borrow a massive amount of money to keep up with the artificial intelligence race. Bloomberg News reported on Monday that the tech giant aims to raise about $15 billion by selling U.S. dollar bonds. This move highlights how expensive it is to build the computers and data centers needed for modern AI.
Tech companies are currently hungry for cash. They need tens of billions of dollars to expand their infrastructure because AI programs require enormous computing power. Even though these expensive projects are not generating huge profits yet, the spending continues to grow.
According to official regulatory documents, Alphabet will sell the bonds in as many as seven different parts. While the filing did not state the exact total, sources familiar with the matter confirmed the $15 billion target. The longest-lasting bond in this group will not mature until the year 2066. Early discussions suggest it will pay interest about 1.2 percentage points higher than standard government Treasuries.
This group of tech giants, known as “hyperscalers,” includes Amazon, Google, Meta, Microsoft, and Oracle. Analysts expect them to spend over $630 billion combined this year, mostly on AI technology. To pay for this, they are turning to the debt market in record numbers.
A report from BofA Securities shows just how much this borrowing has spiked. Last year, these five major companies issued $121 billion in corporate bonds. That is a massive jump compared to the average of just $28 billion per year between 2020 and 2024.
Other companies recently made similar moves. Oracle sought $18 billion in new debt last September. Meta raised $30 billion in October, which stood as the largest bond sale of its kind not involving a company merger.
Barclays analysts believe this trend will not slow down. They predict that corporate bond sales will rise this year. While some companies need cash to pay off old debts or buy other businesses, the main driver remains the urgent need to fund AI investments.
