In a landmark move underscoring the immense capital requirements of the artificial intelligence race, Alphabet Inc. sold a rare 100-year bond as part of a massive $31.51 billion global debt offering. This marks the tech industry's first century bond since 1997 and signals a strategic shift by major technology firms toward funding long-term infrastructure with long-duration debt.
Google’s parent company raised £1 billion (approximately $1.37 billion) through the century bond tranche, which carries a coupon rate of 6.125%. The offering was met with overwhelming investor demand, reportedly nearly ten times oversubscribed, highlighting strong appetite from pension funds and insurers for ultra-long-dated corporate debt. The broader fundraising effort included additional bonds in sterling, Swiss francs, and a separate $20 billion multi-tranche U.S. dollar offering.
Analysts interpret this unprecedented issuance as a direct response to surging AI-driven capital expenditure. Alphabet, alongside peers Microsoft, Amazon, and Meta, is projected to spend a combined $630 billion this year, primarily on data centres and AI chips. The century bond reflects a pivot from historically asset-light models toward owning and financing long-lived physical infrastructure.
Notably, the bonds were issued with no restrictive covenants, such as interest coverage ratios, which is a departure from typical tech debt offerings and provides Alphabet with maximum financial flexibility. While this underscores the company's top-tier creditworthiness, it also sets a new market precedent that lacks traditional investor protections.
The sentiment is fundamentally confident but carries underlying caution. The successful, oversubscribed issuance demonstrates robust institutional confidence in Alphabet's long-term cash flow durability and its central role in the AI ecosystem. It is viewed as a savvy capital-raising strategy, locking in long-term financing at attractive rates for a generational investment cycle. However, the move amplifies concerns about the staggering scale of AI capex without clear near-term profitability milestones, potentially pressuring margins. The lack of covenants, while a sign of strength, is a credit negative that may influence future tech debt markets. Overall, the bond sale is seen as a necessary and strategic step for a company transitioning into a capital-intensive infrastructure owner, but it also quantifies the enormous and escalating cost of competing at the forefront of AI.
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