Alphabet is seeking to raise up to $25 billion from its latest U.S. bond offering, which includes notes with maturities ranging from two to 40 years, offered in as many as 10 parts. This move comes shortly after the tech giant's 2026 capital spending outlook led to a significant selloff in its stock. The debt raise is part of a broader trend among tech giants, including Amazon, Meta, and Oracle, who are increasingly relying on bond markets to finance their substantial AI spending, a departure from their historical reliance on large cash reserves. Collectively, hyperscalers issued approximately $194 billion worth of bonds in 2026 through July 7, marking a 79% increase from about $108 billion in 2025.
Big Tech companies are projected to spend over $730 billion this year, primarily on AI, which is significantly impacting cash flows. Alphabet, for instance, reported its first-ever negative free cash flow in its second-quarter report and has raised its annual capital expenditure forecast for the second time this year. This has fueled concerns among investors about the potential returns on its AI investments, especially amid reported delays in its flagship AI model.
Despite these concerns, the bond offering has seen strong demand, with Alphabet attracting about $115 billion in orders for the debt, which is roughly 4.6 times the target size of $25 billion. This high level of interest suggests that the market is once again open to large tech issuers for AI-linked debt, even after a recent selloff in the sector. However, investors are expecting to be compensated for taking on longer-duration risk, indicating a selective market where higher concessions are being offered to attract demand. Alphabet had previously increased its 2026 capital expenditure outlook to as much as $205 billion. The company has also raised funds through equity offerings and issued bonds in various currencies, including a rare 100-year bond earlier in the year.
