To support a $185 billion AI gamble, Alphabet has launched an epic financing campaign: after a $20 billion US bond issuance attracted over $100 billion in demand, the company not only issued its inaugural Swiss franc bond but also introduced a rare 'century bond' denominated in British pounds! The borrowing spree of tech giants is reshaping the market, as the AI infrastructure race has officially escalated into a brutal era of 'money competition.'
$Alphabet-A (GOOGL.US)$ is launching an unprecedented financing campaign in the global market. The parent company of Google, after completing a record-breaking $20 billion dollar bond issuance, quickly turned to the European market, issuing Swiss franc bonds for the first time and launching a rare century-long pound sterling bond, to meet its AI infrastructure investment needs totaling $185 billion.
According to Bloomberg, Alphabet began selling Swiss franc-denominated bonds on Tuesday, offering bonds with five maturities: three years, six years, ten years, fifteen years, and twenty-five years, with pricing expected to be completed on the same day. This marks the company's first entry into the Swiss franc bond market, signifying a further expansion of its financing map.
The company also plans to issue its first pound sterling bond, with maturities of three years, six years, fifteen years, thirty-two years, and one hundred years. According to data compiled by Bloomberg, this will be the first time a technology company has issued such an extreme maturity bond since Motorola in 1997.
For corporate issuers, issuing 100-year bonds is extremely rare due to uncertainties such as technological obsolescence, mergers and acquisitions, and outdated business models. This market is typically dominated by institutions such as governments and universities.
The immediate backdrop to this global debt issuance wave was Alphabet's announcement last week of a record capital expenditure plan. The company’s capital spending this year will reach up to $185 billion, double last year's expenditure and exceeding the total of the past three years, primarily directed towards artificial intelligence infrastructure construction.
Dollar bonds attract trillion-dollar orders
Alphabet's $20 billion seven-tranche US dollar bond issuance completed on Monday exceeded the initially planned $15 billion target and attracted peak subscription orders of over $100 billion, becoming one of the most strongly demanded corporate bond issuances in history.
Strong market demand led to significant pricing tightening. The shortest-term three-year bond was priced at a premium of just 0.27 percentage points over US Treasuries, far below the initial price discussion of 0.6 percentage points. The longest-term forty-year bond premium narrowed from the initially discussed 1.2 percentage points to 0.95 percentage points.
Bank of America, Goldman Sachs, and JPMorgan served as the lead underwriters for this multi-currency bond issuance. Deutsche Bank, Royal Bank of Canada, and Wells Fargo & Co also participated in managing the US dollar bond issuance.
Tech giants spark financing frenzy
The move by Alphabet is part of a broader financing trend in the technology industry. According to data from Bank of America Securities, the five major AI cloud computing giants— $Amazon (AMZN.US)$ 、 $Alphabet-A (GOOGL.US)$ 、 $Meta Platforms (META.US)$ 、 $Microsoft (MSFT.US)$ and $Oracle (ORCL.US)$ issued $121 billion in the U.S. corporate bond market last year, compared to an average annual issuance of just $28 billion between 2020 and 2024.
Morgan Stanley expects borrowing by cloud computing giants to surge from $165 billion in 2025 to $400 billion this year. This wave of issuance is projected to push the total investment-grade bond issuance to a record $2.25 trillion this year.
Last week, $Oracle (ORCL.US)$ issued $25 billion in bonds, attracting a record peak order book of $129 billion. In October last year, Meta $Meta Platforms (META.US)$ raised $30 billion, setting a record for the largest non-M&A investment-grade bond issuance in a single offering. Bloomberg Intelligence estimates that capital expenditures on artificial intelligence, cloud infrastructure, and data centers will total $3 trillion by 2029.
Spread pressure raises warnings
This issuance frenzy has begun to raise concerns in the market about pressure on bond valuations. Both Vishwas Patkar, head of U.S. credit strategy at Morgan Stanley, and Nathaniel Rosenbaum of JPMorgan expect that the massive issuance will push corporate bond spreads wider.
Patkar stated that the current situation is similar to 1997-98 or 2005, "Credit performance is poor, but it’s not 'end-of-cycle.'" According to Barclays, while pent-up M&A 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 to diversify their debt financing. In 2025, U.S. companies including $Thermo Fisher Scientific (TMO.US)$ and $Caterpillar (CAT.US)$ have issued Swiss franc bonds. The average additional yield that investors demand for holding investment-grade corporate bonds over U.S. Treasuries is currently near its lowest point in decades.
Editor/Doris
