Alphabet to raise $15b in US bond offering

Alphabet Inc., the parent company of Google, is raising US$15 billion through a US bond offering as part of its plan to fund increased capital expenditures in 2026, which could reach up to US$185 billion.

The company is also exploring bond sales in Switzerland and the UK, including a rare 100-year bond issuance, the first such offering by a tech firm since the late 1990s.

The bond sale has attracted over US$100 billion in orders and will be issued in up to seven parts.

The longest maturity bond, due in 2066, is expected to yield about 0.95 percentage points more than Treasuries.

This move is part of broader industry trends, with other tech giants like Amazon, Meta, and Microsoft also planning significant capital spending, estimated to total around US$650 billion in 2026.

Morgan Stanley forecasts hyperscalers will borrow approximately US$400 billion this year, contributing to a record-high corporate bond issuance.

🔗 Source: Bloomberg

🧠 Food for thought

Implications, context, and why it matters.

The race to build AI is running more on debt than earnings

Borrowing now looks like a change in approach for tech giants that once paid for big buildouts with large cash flows 1.
AI spending is starting to outrun operating cash flow, so firms are turning to debt markets at a pace that stands out 2.
Alphabet plans up to US$185 billion in 2026 capital expenditures, more than double its 2025 spending, as demand climbs 3.
Google Cloud’s backlog rose 55% sequentially to US$240 billion at the end of the fourth quarter, putting numbers behind that demand 3.

Big Tech borrowing is squeezing the credit market

Heavy issuance from Alphabet and other peers is already reshaping the wider credit market.
Tech and communications have historically made up about 10% of US corporate bond issuance, yet their larger share can push up borrowing costs for other sectors 4.
The cost to insure against hyperscaler debt through credit default swaps (CDS), an insurance-like contract that pays out if a borrower defaults, has risen since mid-2025 and tracks investor sensitivity to execution risk in large AI capital expenditure plans 2.
Some Wall Street forecasts put technology-sector debt needs as high as US$1.5 trillion over the next few years to fund AI and data center infrastructure, which raises worries about spillover risk 2.