Alphabet Inc. (NASDAQ:GOOGL) raised A$5.5 billion ($3.89 billion) in its first Australian dollar bond sale Wednesday, as the Google parent increasingly taps global debt markets amid an AI investment boom.
Investors submitted more than A$18 billion ($12.8 billion) of orders, over three times the amount sold, according to a term sheet seen by Reuters.
Alphabet became the first AI hyperscaler to tap the Australian-dollar debt market and the first U.S. large-cap tech issuer to sell a “Kangaroo” bond since Apple Inc. (NASDAQ:AAPL) in 2016.
The deal caps a dramatic shift in how Google finances itself.
Chief Financial Officer Anat Ashkenazi said last month that Alphabet’s debt portfolio expanded from roughly $16 billion to about $100 billion in just 12 months.
The Australian sale follows a $25 billion U.S. dollar bond raise earlier this month and an almost $85 billion equity capital raise in June.
AI Buildout Pushes Alphabet Into Negative Cash Flow
Alphabet raised its 2026 capital expenditure forecast to between $195 billion and $205 billion, up from $180 billion to $190 billion, and expects spending to rise significantly again in 2027.
Latest Private Market Opportunities
The strain showed in the second quarter, when Alphabet burned $5.9 billion and reported negative free cash flow for the first time in its history. Operating cash flow of $39.1 billion fell short of $44.9 billion in capital spending.
Alphabet is still producing enormous amounts of cash. Its AI spending is simply growing faster.
Why Bond Investors Keep Saying Yes
Google Cloud revenue jumped 82% to $24.8 billion in the second quarter, while the unit’s operating income more than tripled to $8.8 billion. Cloud backlog reached $514 billion, up more than $50 billion from the prior quarter, and the company says it remains supply constrained.
That demand may explain why credit investors appear so willing to finance the buildout.
Prediction Markets Are Less Convinced About Gemini
Alphabet may have little trouble raising money for its AI buildout, but prediction markets are less convinced that spending will translate into near-term leadership.
Polymarket traders give Google’s next Gemini Pro model just a 10% chance of being released by Aug. 31, with roughly $298,000 traded on that contract. Alphabet said in July that Gemini 3.5 Pro remained in testing even as it began what it called its most ambitious pre-training run yet for Gemini 4.
Polymarket gives Anthropic’s Claude a 67% chance of having the best AI model at the end of the year. Google is in fourth, at 7%.
Alphabet has no shortage of capital for the AI race. The bigger question is whether spending approaching $200 billion this year will be enough to put Google back at the front of it.
Image: Shutterstock
© 2026 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
