Alphabet Inc. has received an overwhelming response to its latest bond offering, with investor orders exceeding $100 billion for a sale anticipated to be approximately $15 billion. This level of demand is considered among the strongest ever for a corporate bond offering, underscoring significant investor appetite for companies involved in the artificial intelligence sector.
This robust demand is part of a larger trend of increased borrowing by U.S. tech giants to fund AI-driven spending. Alphabet's recent global bond raises, totaling $31.51 billion across U.S. dollar, sterling, and Swiss franc markets, reflect this aggressive pursuit of capital for AI expansion. Other major AI hyperscalers, including Amazon, Meta, Microsoft, and Oracle, collectively issued $121 billion in U.S. corporate bonds last year, highlighting the intense funding race in the AI space.
Notably, Alphabet's bond sales have included unusual features, such as a 100-year "century" bond in the sterling market. This particular tranche alone garnered nearly 10 times the sought amount, with bids reaching £9.5 billion for a £1 billion offering that carries a 6.125% interest rate. Despite the strong demand, some analysts have raised concerns about the lack of typical investor protections, such as change-in-control covenants, in these new bonds, which could pose risks to future bondholders.
