This article first appeared on GuruFocus.
Alphabet Inc. (GOOGL, Financials) parent Google is allegedly set to pay about 7% on long-dated Australian debt as its effort to invest in AI continues to lift funding needs.According to Bloomberg statistics quoted by Seeking Alpha, the company is looking to raise around A$5 billion, or $3.5 billion, through a multi-part bond sale.The 20-year tranche is being spoken at about 6.95% however final pricing may possibly differ. Alphabet is also selling 3-, 5-, and 10-year maturities.The Australian deal follows the company’s $25 billion raise in the U.S. bond market. This year, Alphabet has issued debt in numerous other currencies as well. The big picture for investors, really, is the extent of the AI buildout.Alphabet has been pouring money into data centers, chips and cloud infrastructure, and even one of the world’s strongest balance sheets is increasingly relying on debt to support that expansion. That capital intensity is difficult to ignore when long-term borrowing costs are close to 7%.
