Alphabet, the parent behind one of the world’s largest search and cloud platforms, is in the market with a major US dollar bond deal that is expected to raise about $US15 billion after drawing more than $US100 billion in orders. This is one of the strongest responses ever seen for a corporate issue. It comes as the company plans to spend up to $US185 billion this year, far above earlier forecasts, to expand AI infrastructure and data centres at a time when the broader hyperscale cloud sector looks set to pour over $US650 billion into similar projects.
Across the investment‑grade market, demand for AI‑linked debt has been so strong that large technology and cloud providers have been issuing in multiple currencies and maturities, including a rare 100‑year sterling bond as part of Alphabet’s wider funding push. Recent deals from other major cloud and software groups have already tested investor appetite, with one raising $US25 billion against orders of roughly $US129 billion. Banks involved in the latest transactions appear to be positioning for record annual issuance.
Credit strategists at major global banks now expect hyperscale tech borrowers to raise around $US400 billion this year alone, up sharply from projections for about $US165 billion next year. They see this wave helping drive total high‑grade corporate issuance to roughly $US2.25 trillion. They warn that while default risks do not yet look like an end‑of‑cycle event, such heavy supply seems likely to push corporate bond spreads wider as investors demand a little more compensation for absorbing so much new paper.
In the bigger picture, Alphabet’s move highlights how the race to dominate AI is pushing even the strongest technology companies to explore every corner of global capital markets, from structured investors to ultra long‑dated buyers like pension funds and insurers. That strategy looks like it could lock in cheap funding and diversify investor bases, but it also raises questions about how sustainable this pace of borrowing will be if AI returns disappoint or if credit conditions tighten, especially for ultra‑long bonds that will outlive multiple economic and technology cycles.
