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Alphabet is preparing to price a rare 100-year bond, according to a bookrunner memo seen by Reuters, as artificial intelligence investment fuels a sharp rise in borrowing across U.S. technology companies.
The Google parent plans to sell 5.5 billion pounds, or about $7.53 billion, of sterling bonds in a five-part transaction. One tranche would mature in a century and is expected to raise 1 billion pounds, the memo showed.
If completed, the deal would mark the technology sector's first century bond sale since Motorola's issuance in 1997, according to data cited by market participants. Long-dated bonds of this kind are typically associated with governments or utilities with stable, predictable cash flows.
Alphabet has also tapped other markets to fund its expansion. Separately, it raised 3.055 billion Swiss francs through a five-part bond sale with maturities ranging from three to 25 years, according to another bookrunner memo. The banks involved declined to be named because they were not authorised to speak publicly.
Century bonds are rare. Issuance rose during the era of ultra-low interest rates that followed the global financial crisis, but volumes faded after 2022 when central banks sharply increased borrowing costs in response to post-pandemic inflation.
"You have an extraordinary time period that we're living through now with the change in technology," said Jason Granet, chief investment officer at BNY. "A 100-year debt issuance out of Google is indicative of the scale of capital spending and investment flowing into technology markets."
Alphabet shares were down about 1.8% in afternoon trading on Tuesday. Earlier this week, the company also sold $20 billion of bonds in a seven-part U.S. dollar offering, with maturities stretching from 2029 to 2066.
Big Tech's turn to debt markets has stirred investor unease, as returns from AI deployments have yet to fully match the scale of spending. Capital expenditure by Alphabet, Microsoft, Amazon and Meta is expected to reach at least $630 billion this year, largely directed toward data centres and specialised AI chips.
