Alphabet's 100-year sterling bond stokes fears of debt-fuelled AI arms race
Alphabet sold a rare 100-year pound bond as part of a roughly $20 billion multi-currency raise to fund massive AI and data center spending, drawing strong demand but prompting warnings about long-term risk and market froth.
- The 100-year sterling bond was issued inside a multi-tranche, multi-currency borrowing program totaling about $20 billion that also included dollar, euro and Swiss franc tranches.
- The century bond attracted almost 10 times orders and priced around 120 basis points above 10-year gilts.
- Century bonds are rare for corporates and typically appeal to institutional investors such as pension funds and insurers matching long-term liabilities.
- Alphabet expects capital expenditure of about $185 billion this year as hyperscalers expand AI infrastructure while strategists say tech firms could issue roughly $3 trillion of debt over the next five years.
- Analysts say the deal diversifies Alphabet's funding and taps insurer and pension demand but raises concerns about tight credit spreads, uncertain long-term data center demand and signs of market froth