Alphabet returns to bond market despite AI spending worries
It is offering notes in as many as 10 parts, with maturities ranging from two to 40 years, sources say
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ALPHABET has started marketing a US investment-grade bond offering, testing investor appetite soon after its raised 2026 spending forecast helped trigger a sell-off in AI-related debt.
The Google and YouTube parent is offering notes in as many as 10 parts, with maturities ranging from two to 40 years, according to a person familiar with the matter. Initial price talk for the longest-tenored tranche is a premium of about 1.55 percentage points above US Treasuries, said the person, who asked not to be identified.
The group is looking to raise as much as US$25 billion from its latest US bond offering, Bloomberg News reported on Thursday (Aug 5), citing people familiar with the matter.
Investor appetite for bonds funding unprecedented artificial intelligence spending cooled in July amid concerns over whether massive AI investments will pay off. Alphabet increased its 2026 capital-expenditure forecast to as much as US$205 billion, more than double 2025’s outlays.
A BlackRock-linked firm last week sold US$12.5 billion of bonds tied to a Meta Platforms data centre project in Texas. Initial demand was lacklustre, following soft interest for an offering by Amazon. Newly issued AI-related notes from firms including SpaceX saw spreads widen in the secondary market.
Alphabet, which sold more than US$50 billion of debt in the first half of 2026, and Amazon have led the AI-infrastructure borrowing spree. Alphabet last tapped the US high-grade debt market in February, before selling bonds in Swiss francs, British pounds, euros, Canadian dollars and Japanese yen.
The spending contributed to Alphabet posting its first quarter of negative cash flow since its 2004 initial public offering. BLOOMBERG
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