MOUNTAIN VIEW, Feb 10 — Alphabet said it sold bonds worth US$20 billion (RM78.69 billion) in a seven-part offering, tapping the debt market to fund its surging spending on artificial intelligence (AI) infrastructure.
Big Tech's appetite for debt is surging, after years of relying on strong cash flows to fund investments.
Alphabet is also planning a debut sterling offering that may include a rare 100-year bond, the tech industry's first since Motorola's 1997 issuance, according to media reports.
Yet Big Tech's pivot to the bond market has raised investor concerns as payoffs have not kept pace with the huge AI spending from United States (US) tech giants, while businesses adopting the technology have so far seen limited productivity gains.
Capital expenditure from Alphabet, Microsoft, Amazon.com, and Meta Platforms is expected to total at least US$630 billion (RM2.47 trillion) this year, with most of the spending focused on data centres and the AI chips that power them.
The seven tranches of Alphabet's dollar notes mature every few years, from 2029 through 2066, according to a regulatory filing on Tuesday.
Some analysts said Big Tech's greater use of debt reflects a pivot from asset-light models toward long-term infrastructure.
"Century bonds are usually the preserve of governments or regulated utilities with very predictable cash flows, so this deal shows that, at least for now, investors are willing to take on very long-dated risk tied to AI investment," said eToro global market analyst Lale Akoner.
Oracle had also disclosed a US$25 billion (RM98.36 billion) note sale on February 2 in a securities filing.
The AI hyperscalers — a group that also includes Oracle — issued US$121 billion (RM476 billion) in US corporate bonds last year, according to a January report by BofA Securities.
