The AI investment boom drives tech giants to increase financing Alphabet(GOOG.US, GOOGL.US) plans to issue approximately $15 billion in high-grade bonds

As the artificial intelligence investment boom continues to heat up, Google’s parent company Alphabet (GOOG.US, GOOGL.US) is planning to raise approximately $15 billion through the issuance of high-grade U.S. dollar bonds. Sources familiar with the matter say this move will further add to the ranks of companies at the forefront of AI investment engaging in intensive financing.

Large cloud computing companies, also known as hyperscalers, are expected to invest over $650 billion this year to expand AI infrastructure. Since last year, this group has issued a large volume of bonds to the bond market and has been eagerly absorbed by investors. However, concerns about rapid AI spending and the potential for bubbles are also rising.

Just last week, Oracle (ORCL.US) raised $25 billion through bond financing, with order peaks reaching $129 billion, setting a record.

Sources say that Alphabet’s dollar bond issuance will be divided into up to seven maturities. Preliminary pricing discussions indicate that bonds with the longest maturity in 2066 will have a yield premium of about 1.2 percentage points over U.S. Treasuries. In addition to dollar bonds, the company has also appointed banks to prepare for potential bond issuances in Swiss francs and British pounds, including a rare 100-year bond. Alphabet did not immediately comment.

Banks involved in underwriting this dollar bond issuance include JPMorgan Chase, Goldman Sachs, and Bank of America, all of which declined to comment.

Last week, Alphabet stated that its capital expenditures this year are expected to reach as high as $185 billion, far exceeding previous market forecasts. At the same time, the company’s Q4 earnings also outperformed the average analyst expectations summarized by Bloomberg.

The company’s last entry into the U.S. bond market was in November of last year, when it raised $17.5 billion, attracting about $90 billion in orders. This included a 50-year bond, which was the longest-term bond issuance by a U.S. dollar-denominated tech company last year, and the bond has continued to perform strongly in the secondary market. During the same period, Alphabet also issued €6.5 billion in bonds in the European market.

According to estimates, by 2029, capital expenditures related to AI, cloud infrastructure, and data centers could reach a total of $3 trillion.