Alphabet’s Century Bond Tests AI Spending Plans And Regulatory Resilience

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• Alphabet, ticker NasdaqGS:GOOGL, has issued a rare 100 year bond to help fund a large ramp up in AI infrastructure spending.

• The company is planning record capital expenditures on data centers and related AI assets, drawing attention to how it allocates cash over the long term.

• At the same time, Alphabet faces a new European Union antitrust probe focused on its search advertising practices.

Alphabet, currently trading at $305.72, sits at an interesting point where its market role is broadening beyond digital advertising into large scale AI infrastructure. The stock has seen a 65.7% return over the past year and a 226.5% return over three years. These figures provide context as investors weigh the implications of bigger spending and fresh regulatory questions.

For you as an investor, the combination of a 100 year bond, heavy AI focused capital spending and an EU antitrust investigation raises questions around long term financing risk, returns on infrastructure, and regulatory exposure. The following sections break down what these developments could mean for Alphabet’s business mix, cash flow profile, and risk considerations without assuming how the share price will react.

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Alphabet’s decision to issue a rare 100 year sterling bond, alongside a broader US$20b to US$32b multi currency bond sale, indicates it wants to lock in fixed rate funding for its US$175b to US$185b AI focused capital expenditure plan without relying solely on cash flows or equity. The new notes span short, medium and ultra long maturities in both dollars and pounds, mostly senior unsecured and callable. This staggers refinancing risk and keeps existing shareholders from being diluted. On the other hand, this clearly lifts gross debt and future interest expense, while the very long dated 2126 notes introduce obligations that extend far beyond any reasonable forecasting window. With an EU antitrust probe now examining search ad pricing, the key question for you is whether the cash flows from AI infrastructure and cloud contracts are sufficient over time to comfortably service a larger debt stack if regulation weighs on ad margins or growth slows.

• The heavy bond issuance directly supports the narrative’s AI and cloud catalysts by funding the large scale data center and custom chip build out described there.

• The higher leverage and long duration obligations could challenge the narrative’s assumption that rising AI driven efficiency automatically leads to higher margins, particularly if depreciation and interest costs bite faster than revenue growth.

• The scale and tenor of the 100 year bond, and investor enthusiasm for it, are not fully captured in the narrative and may change how you think about Alphabet’s balance sheet risk and capital allocation over very long periods.

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• ⚠️ A materially higher debt load and long dated interest commitments could pressure free cash flow if AI monetisation or ad revenue are weaker than expected.

• ⚠️ The fresh EU antitrust probe into search ad auctions adds regulatory uncertainty at the same time Alphabet is committing to very large, long lived AI assets.

• 🎁 Locking in fixed rate funding across multiple maturities increases financial flexibility, supporting continued AI infrastructure investment without issuing new equity.

• 🎁 Strong demand for the 100 year bond points to deep credit market confidence in Alphabet’s ability to service long term debt, which can be an advantage versus rivals such as Microsoft, Amazon or Meta that are also investing heavily in AI.

From here, it is worth watching how Alphabet’s net debt and interest expense trend relative to its US$402.8b of annual sales and US$132.2b of net income reported in 2025, since those figures frame its current capacity to carry more leverage. You may also want to follow disclosures on AI related capital expenditures and utilisation rates for new data centers, as well as any updates on the EU search ad investigation and other regulatory actions that could affect cash generation. The balance between continued share buybacks, dividends and further debt issuance will give extra clues on how management prioritises capital returns versus infrastructure build out.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include GOOGL.

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