This article first appeared on GuruFocus.
Alphabet (NASDAQ:GOOG) is pressing deeper into global debt markets as its AI funding needs continue to expand. After bankers were still finalizing the company’s $17 billion bond sale, Alphabet was already preparing another deal, this time in yen. The company had previously tapped euros, Canadian dollars, dollars, pounds and Swiss francs, putting it on track to raise close to $60 billion once the yen offering is finalized. That four-month borrowing push is roughly four times the amount of bonds Alphabet sold in its first 26 years, highlighting how aggressively the Google parent is moving to finance an AI buildout that could require nearly $5 trillion in hyperscaler capital spending by the end of 2030.
Wall Street bankers view Alphabet’s approach as a possible blueprint for other major technology companies, since the US market alone may not be enough to absorb the scale of AI-related borrowing without pressuring demand and funding costs. Tech companies have already sold more than $300 billion of debt to US investors to help fund AI spending, while nearly 40% of high-grade US corporate bond sales this year have come from technology companies and hyperscalers, excluding financial issuers, according to Barclays. Alphabet’s foreign-market presence has also grown quickly, with about 22 billion of euro-denominated debt, making it the eighth-largest non-financial issuer in that market, while only about 55% of its bond debt is now in US dollars before the yen offering.
For investors, the bigger question is whether this AI-driven borrowing cycle could start reshaping global credit markets. Amazon (NASDAQ:AMZN) recently raised more than $3 billion in its first Swiss franc deal, while bankers and investors expect hyperscalers to keep searching overseas for capital as AI spending accelerates. Demand still appears available for now, especially because technology accounts for less than 5% of major euro, sterling and Swiss franc credit benchmarks, but repeated foreign-currency issuance could possibly crowd out local borrowers, weigh on existing bonds, or force wider concessions if investors begin worrying that another large hyperscaler deal is always around the corner.
