Alphabet Raises $31.5 Billion in Largest-Ever Tech Bond Sale to Fund AI Infrastructure

In an unprecedented move reflecting the scale of the bet on AI's future, Alphabet, Google's parent company, completed the largest bond sale in tech history — $31.5 billion across three currencies. Most notably: a 100-year bond, the first by a tech company since Motorola issued a similar bond in 1997.

Massive Numbers Across Three Fronts

The issuance came in three major tranches:

$20 billion in U.S. dollar-denominated bonds, spread across seven tranches maturing between 2029 and 2066
£5.5 billion (approximately $7.53 billion), which included the century bond
CHF 3.055 billion (approximately $3.98 billion)

The sterling and Swiss franc tranches are the largest-ever corporate issuances in their respective markets.

The Century Bond: A 100-Year Bet

The most striking element is the 100-year bond worth £1 billion at a 6.125% interest rate. Demand exceeded supply by approximately 9.5 times, with £9.5 billion in orders against only £1 billion on offer.

The bond attracted significant interest from major institutional investors, particularly life insurance companies, pension funds, and endowments seeking long-duration assets to match their liabilities.

Lale Akoner, analyst at eToro, commented:

"Century bonds are typically the domain of governments with predictable cash flows... but investors are willing to take on this long-term risk tied to artificial intelligence."

Why Is Alphabet Borrowing?

Despite being one of the world's most cash-rich companies, the scale of spending required to build AI infrastructure has become so enormous that even tech giants are turning to debt markets. The company announced plans to spend up to $185 billion in capital expenditures this year to build data centers and acquire specialized AI chips.

In the broader context, total capital expenditure by Alphabet, Microsoft, Amazon, and Meta combined is expected to reach at least $630 billion during 2026, most of it directed toward AI infrastructure.

Massive Demand Exceeding $100 Billion

The dollar-denominated issuance alone attracted over $100 billion in purchase orders, prompting the company to increase the offering from the planned $15 billion to $20 billion. This overwhelming demand reflects investor confidence in Alphabet's ability to generate returns from its AI investments.

Jason Granet, Chief Investment Officer at BNY, stated:

"We're living in an exceptional period... with the change in technology and capital expenditure flowing through markets and technology."

Concerns and Reservations

Despite strong demand, analysts raised some concerns:

Lack of restrictive covenants: Alphabet's bonds contain no meaningful restrictive conditions — unusual even for large tech companies
No subsidiary guarantees or subordination protections
ROI risks: Investor concerns about whether returns from AI spending will justify the amounts invested

Analysts at Covenant Review noted that Alphabet's bonds "set a problematic precedent despite the company being a low-risk issuer."

Strategic Implications

This issuance carries several important signals:

Shift in financing model: Major tech companies moving from relying on retained earnings to debt markets to fund AI spending
Long-term confidence: Issuing a 100-year bond means Alphabet is betting on its survival and continued operations through 2126
A billion-dollar arms race: Confirms that the AI race is no longer just a technical competition but has become a massive financial and investment race

What This Means for the MENA Region

As tech giants move to expand their infrastructure globally, opportunities for establishing data centers in the Middle East and North Africa are growing. Google, Microsoft, and Amazon have already announced expansion plans in Saudi Arabia, the UAE, and Qatar — signaling that a share of these massive investments will flow into the region.

Source: Fortune | Global Banking & Finance