Alphabet raised US$20 billion (MX$344 billion) through a seven-part US dollar bond sale, marking a strategic shift as the Google parent increasingly turns to debt markets to finance its accelerating artificial intelligence infrastructure buildout. The offering, which was upsized from an initial US$15 billion after orders exceeded US$100 billion, comes amid a period of record capital expenditure and follows the company’s attainment of a rare US$4 trillion market capitalization milestone.
The bond sale underscores a broader shift among the so-called “Magnificent Seven” technology firms, which are moving away from their traditional reliance on internal cash flow to fund next-generation technologies. Alphabet’s long-term debt quadrupled in 2025 to US$46.5 billion, and market analysts expect total borrowing across the “hyperscaler” group—including Microsoft, Amazon, and Meta Platforms—to reach US$400 billion in 2026.
The Rise of the Century Bond
A focal point of Alphabet’s financing strategy is an extremely rare 100-year sterling bond. The company offered a limited US$1.28 billion-equivalent tranche, which reportedly received orders nearly ten times the available amount. This marks the first century bond issued by a technology company since Motorola in 1997.
“Century bonds are typically exclusive to governments or regulated utilities with very predictable cash flows, so this operation shows that, at least for now, investors are willing to take very long-term risks linked to AI investment,” said Lale Akoner, global market analyst, eToro.
The US dollar tranches range in maturity from 2029 to 2066. While the 40-year bond was initially expected to price at approximately 1.2 percentage points above US Treasuries, strong demand compressed the spread to around 0.95 percentage points. JPMorgan, Goldman Sachs, and Bank of America are managing the sale, which may also include a Swiss franc-denominated tranche.
Capital Expenditure and Infrastructure Demands
The borrowing spree supports a record AI capital expenditure (capex) forecast. Alphabet disclosed it may spend up to US$185 billion this year—approximately double its 2025 capex—to accelerate development of its Gemini large language models and expand its global cloud and data center footprint.
Total capex for the four dominant US technology giants is projected to reach US$630 billion in 2026. Sundar Pichai, CEO, Alphabet, identified “compute capacity” as the primary constraint keeping executives awake. “Power, land, supply chain constraints—how do you ramp up to meet this extraordinary demand for this moment?” Pichai said during a recent earnings call.
Anat Ashkenazi, CFO, Alphabet, emphasized that the company intends to maintain a “healthy financial position” while investing aggressively. Despite the increase in debt, Alphabet retains cash and equivalents exceeding US$125 billion.
Strategic Partnerships and Market Positioning
The investment surge is already reshaping market dynamics. Alphabet’s market capitalization reached US$4 trillion in early 2026, surpassing Apple as the world’s second-most valuable company for the first time since 2019. This valuation milestone has been attributed to the successful rollout of Gemini 3 and the Nano Banana image-generation tool.
Alphabet also initiated a multi-year partnership with Apple to integrate Gemini AI models into Siri, beginning in late 2026. The agreement is estimated to be worth approximately US$1 billion annually. Apple reportedly determined that Google’s cloud infrastructure offered the scalability required for advanced reasoning tasks that on-device processing could not support.
Google Cloud has emerged as a primary growth engine, reporting a 34% increase in revenue. Sundar Pichai noted that the cloud division signed more contracts exceeding US$1 billion during the third quarter of 2025 than in the previous two years combined. The segment’s backlog of non-recognized revenue reached US$155 billion by late 2025.
Risk Management and Institutional Scrutiny
In its annual financial report, Alphabet acknowledged new risks associated with its aggressive infrastructure expansion. The company highlighted the possibility of developing “excess capacity” and cited the complexity of large-scale leasing arrangements with third-party data center operators.
The rise of generative AI also presents potential challenges to Alphabet’s core advertising business. As users increasingly adopt AI-driven search formats, concerns have emerged that traditional search query volumes could decline. “There is no assurance that we will adapt effectively and competitively to meet this shift, and that such advertising formats, strategies, and offerings will be successful,” the company stated in its SEC filing.
Despite these risks, Google’s fourth-quarter advertising revenue rose 13.5% to US$82.28 billion. The Gemini AI application now reports more than 750 million monthly active users.
Legal and Competitive Landscape
Alphabet’s financial maneuvers come amid ongoing antitrust scrutiny. Although a September 2025 judicial ruling prevented the forced divestiture of the Chrome browser, the company continues to face trial over allegations of monopolistic practices in the online advertising market.
The competitive landscape shifted further in 2025 after OpenAI’s GPT-5 reportedly underperformed market expectations. This development enabled Google Cloud to strengthen its position as a preferred infrastructure provider for enterprise clients. Alphabet has also begun leasing its internally developed AI chips—previously reserved for proprietary use—to external partners, including Apple, to meet escalating computational demand.