🧠 Food for thought

Implications, context, and why it matters.

Alphabet is tapping rare century bonds amid strong investor demand

• Alphabet’s latest bond sale drew heavy interest. A planned $20 billion U.S. dollar deal pulled in more than $100 billion in orders 1.
• Across tech, Oracle raised $25 billion and demand reached a record $129 billion at its peak 1.
• Alphabet plans capital expenditures of up to $185 billion this year, mostly for AI. It is also preparing a 100-year bond in the UK, a rare structure and the first try at that maturity by a tech company since the late-1990s dotcom frenzy 1.
• The approach lets Alphabet reach investors like pension funds and insurance companies that prefer very long-dated assets 2.

The AI arms race is reshaping Big Tech’s finances and could create new risks

• Planned AI spending is so large that even the biggest tech firms may lean more on debt while paying for data centers and other buildouts 1.
• By 2026, forecasts expect Microsoft to be the only major tech company whose operating cash flow covers its AI investments. Other Big Tech finance teams may need bond issuance to fill the shortfall 3.
• This echoes earlier infrastructure waves such as railroads and telecom fiber, where builders often missed out on the long-run profits 4.
• Past cycles suggest customers can gain the most once infrastructure gets cheaper, so AI’s biggest winners may be the businesses that use AI rather than the firms constructing the backbone 4.