Alphabet to sell rare 100-year bond to fund AI expansion

Alphabet plans to price a rare 100-year sterling bond aiming to raise about £1 billion as part of a larger £5.5 billion offering, and also raised Swiss franc and U.S. dollar debt to help finance AI-related capital spending.

Alphabet is preparing to price a rare 100-year sterling bond as part of a five-part £5.5 billion offering, with the century tranche aiming to raise about £1 billion. The company also raised 3.055 billion Swiss francs in a separate bond sale and sold $20 billion in U.S. bonds maturing between 2029 and 2066. These moves come as major U.S. tech firms increase capital spending on data centres and AI chips. Century corporate bonds have been uncommon since interest rates rose after 2022. Key details: - The 100-year tranche is part of a five-part sterling deal totaling £5.5 billion (about US$7.53 billion). - The century bond tranche aims to raise roughly £1 billion, according to a lead manager memo seen by Reuters. - Alphabet also raised 3.055 billion Swiss francs in a five-part sale with maturities from three to 25 years. - The company sold $20 billion in a separate seven-part U.S. offering with maturities starting in 2029 and extending to 2066. - Reuters calculations cited expected capital expenditure of at least $630 billion this year from Alphabet, Microsoft, Amazon and Meta, focused on data centres and AI chips. - Analysts quoted in the reporting noted century bonds are rare for corporations and highlighted the link to long-term infrastructure and AI investment. Summary: The bond offerings add to a broader borrowing trend among large tech firms as they finance AI-related capital projects. The immediate next step reported is the pricing of the 100-year sterling tranche; market reception and longer-term effects are undetermined at this time.