Alphabet, Google's parent company, is selling a rare 100-year bond as part of its borrowing efforts to finance massive AI investments. This marks the first such long-term issuance by a tech company in nearly three decades. The company is also upsizing a $20 billion dollar bond sale amid strong investor demand.
Alphabet has arranged banks to issue a 100-year bond in sterling this week, forming part of its debut in that market. This century bond is unusual for the tech sector, where most issuances extend up to 40 years. The last tech company to sell a 100-year bond was IBM in 1996. Recent sterling century bonds have come from issuers like the University of Oxford, EDF, and the Wellcome Trust in 2018.
Alongside the sterling sale, Alphabet is offering $20 billion in dollar bonds on Monday, up from an initial $15 billion due to robust demand, and preparing a Swiss franc bond. A banker involved noted that the multi-currency approach aims to broaden the investor base given the huge capital requirements for Big Tech. "There might be a supply-demand imbalance if you were to try to come back to the US dollar market over and over again," the banker said. Issuing in sterling is more cost-effective than in dollars, where rates are higher.
Such bonds may attract life insurance companies and pension funds, which seek long-term assets, according to Nicholas Elfner of Breckinridge Capital Advisors. However, Tony Trzcinka of Impax Asset Management opted out of the offering, citing low yields and worries over exposure to hyperscalers' AI-related spending. "It wasn’t worth it to swap into new ones," Trzcinka said. "We’ve been very conscious of our exposure to these hyperscalers and their capex budgets."
Big Tech firms and suppliers plan nearly $700 billion in AI infrastructure investments this year, increasingly funded through debt. Alphabet previously sold $17.5 billion in US bonds in November, including a 50-year tranche, and €6.5 billion in Europe. Oracle raised $25 billion last week with over $125 billion in orders. Alphabet, Amazon, and Meta have raised capital expenditure forecasts in recent earnings.
Last week, Alphabet reported first-time annual sales over $400 billion and plans up to $185 billion in capex this year, double last year's, to support its Gemini AI assistant. Its long-term debt reached $46.5 billion in 2025, up over fourfold, with $126.8 billion in cash equivalents. Investor interest was keenest for shorter maturities: the three-year bond priced at 0.27 percentage points above US Treasuries, tighter than initial 0.6 points. The 40-year portion yields 0.95 points over, down from 1.2 points. Bookrunners include Bank of America, Goldman Sachs, and JPMorgan.
