Alphabet issues 100-year bonds for AI investments

Investments in AI, planned or underway, have skyrocketed to levels never seen before in the global industry. For this year alone, it is estimated that the large hyperscalers will spend 700 billion dollars. And there will be billions at the end of the decade because this technology is not going to stop growing, if it does not explode sooner as some analysts warn.

Although Big Tech’s cash flows remain huge, they do not seem sufficient for the frenetic race for global control of AI and the use of debt is intensifying. A wave of loans with which large technology companies want to finance their enormous investments. Alphabet, Google’s parent company, has announced the launch of a really curious bond issue, in pounds sterling and with maturities of up to 100 years. Alphabet thus becomes the first technology company to issue a centenary bond in almost three decades.

Century bonds (long-term loans in their most extreme form) are highly unusual, although they were sold in large quantities during the period of rock-bottom interest rates that followed the financial crisis, including by governments such as Austria and Argentina. These sales are even rarer in the technology sector, where most of the largest groups in the sector issue bonds with a maximum of 40 years. IBM or Motorola were the last to

Centennial bonus to cover investments in AI

Alphabet’s multi-currency bonus offering is an effort to expand the investor group given the enormous amount of capital that large technology companies need. Issuing a hundred-year bond in the sterling market is more profitable than in the dollar market, where the interest rate is higher.

While a century bond is “very unusual” for technology companies, it could be attractive to buyers such as life insurance companies and pension funds, which have a mandate to Buy long-term assets, said Nicholas Elfner, co-head of research at Breckinridge Capital Advisors. But it also has its problems: “There could be an imbalance between supply and demand if you tried to go back to the US dollar market again and again”.

Tony Trzcinka, a manager at Impax Asset Management, which bought Alphabet bonds last year, said he will skip this issuance due to insufficient yields and concerns about the overexposure to companies with complex financial obligations linked to AI investments. “It’s not worth the move to the new ones… We’ve been very conscious of our exposure to these hyperscalers and their capital investment budgets.”

Alphabet, Amazon y Meta increased their capital spending plans during its most recent earnings reports, raising questions about whether it could finance the unprecedented spending with its cash flows alone. In November, Alphabet sold $17.5 billion in bonds in the United States, including a 50-year bond (the longest-maturity dollar bond sold by a technology group last year), and raised €6.5 billion in European markets. Last week, Oracle raised $25 billion with a bond sale that attracted more than $125 billion in orders.

Alphabet’s long-term debt rose to $46.5 billion in 2025, more than four times the previous year, although it had cash and equivalents of $126.8 billion at the end of the year. Big tech companies and their suppliers are expected to invest nearly $700 billion in AI infrastructure this year. The resource of debt markets to finance the construction of gigantic data centers, will continue.