Alphabet Raises $20 Billion via 100‑Year Bonds to Fund $185 Billion AI Expansion

Updated 2026-02-20 04:13:12+00:00 (6 articles)

Bond Issuance Details and Investor Demand Alphabet unveiled a 100‑year “century” bond series, issuing debt in British pounds and Swiss francs to align with European data‑centre spending. Initial placement was quickly expanded to a $20 billion raise after “strong investor demand,” marking one of the largest long‑dated offerings by a tech firm in 2026 [1]. The bonds will not mature until the 22nd century, providing a permanent capital source for the company’s AI buildout [1].

Scale of AI Capital Expenditure Planned for 2026 Alphabet projects up to $185 billion in AI‑related hardware purchases and data‑centre construction this year, rivaling Amazon’s $200 billion target and comparable to the GDP of a mid‑sized nation [1]. The spending covers next‑generation GPUs, custom ASICs, and extensive fiber‑optic networks to support generative‑AI services. This massive outlay underscores the intensity of the AI arms race among leading cloud providers [1].

Strategic Rationale: Preserving Cash and Long‑Term Hedge By tapping the bond market, Alphabet keeps its cash reserves intact for strategic acquisitions and share buybacks, effectively letting lenders subsidise the physical AI rollout [1]. The century‑bond structure creates a “permanent capital base” that shields the firm from refinancing pressures and potential liquidity crises [1]. Management frames the issuance as a hedge against technology risk, ensuring funding remains available even if disruptive innovations emerge [1].

Potential Outcomes Outlined in Scenario Analysis Alphabet’s internal scenario analysis describes three possible AI‑investment trajectories: “Sovereign Tech,” where AI becomes a high‑margin utility; “Utility Squeeze,” where AI commoditisation compresses margins; and “Obsolescence Trap,” where current infrastructure could become worthless if a breakthrough technology displaces existing models [1]. The company plans to adjust spending and pricing strategies based on which scenario materialises. This forward‑looking approach aims to protect shareholder value across divergent future market conditions [1].

Sources

1.
The Hindu: Alphabet Issues 100‑Year Bonds to Finance AI Infrastructure – Reports the launch of $20 billion of 100‑year bonds, the $185 billion AI capex target, and the strategic use of debt to preserve cash and hedge long‑term technology risk .
2026-02-20 04:13:12+00:00

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Timeline

Dec 9, 2025 – Oracle’s roughly $300 billion OpenAI data‑center contract creates a massive single‑customer revenue exposure as the company expects AI‑infrastructure capex to exceed $400 billion this year and projects cloud‑infrastructure revenue of $166 billion by FY 2030, with Sep‑Nov growth of 71.3 % and AI‑infra margins of 30‑40 %, prompting analysts to flag concentration risk and potential margin pressure[6].

Jan 10, 2026 – At CES, AI‑driven robots dominate the floor, including Boston Dynamics’ Atlas humanoid slated for deployment at DeepMind and Hyundai’s Robotics Metaplant Applications center, while Nvidia announces its next data‑center platform for H2 2026; Panos Panay tells CNN the AI boom “is not a fad” and represents the earliest stage of what’s possible[3].

Jan 10, 2026 – S&P Global reports $61 billion invested in data‑center capacity for AI in 2025, and Goldman Sachs projects AI capex to surpass $500 billion in 2026; analyst Julien Garran estimates the AI bubble is 17 times larger than the dot‑com era, underscoring unprecedented funding pressure[3].

Jan 28, 2026 – Cisco CEO Chuck Robbins declares AI “bigger than the internet,” warns of “winners … and carnage,” and likens the surge to the 2000 dot‑com bubble; he notes £1.3 billion of AI‑related orders this quarter**, cautions workers to fear skilled AI users more than the technology (“you shouldn’t worry … as much about AI taking your job as you should worry about someone who’s very good using AI taking your job”), and highlights quantum research to counter AI‑enhanced cyber threats[2].

Feb 5, 2026 – Amazon pledges a $200 billion AI and infrastructure spend, dwarfing its prior $125 billion outlay, and simultaneously cuts another 16,000 jobs after an October layoff of 14,000; the announcement triggers a near‑9 % share drop, adds to a broader $650 billion AI spending wave among Big Tech, and prompts leaders like Mary Therese Barton and Jamie Dimon to warn of a potential “sharp correction” bubble[1].

Feb 11, 2026 – Tech stocks tumble as investors react to AI‑spending worries: Nvidia loses ~17 %, the Nasdaq heads for its worst stretch since April, and Amazon’s shares fall ~10 % after its $200 billion capex forecast outpaces Wall Street’s $146 billion estimate; software firms such as Asana, Docusign and ServiceNow plunge over 50 % following Anthropic’s Claude plugins launch, with analysts likening the volatility to the “DeepSeek moment” and predicting up to one‑third of AI capital could be wasted[4].

Feb 19, 2026 – Alphabet issues $20 billion of 100‑year “century” bonds in pounds and francs to fund an anticipated $185 billion AI capex this year, preserving cash for acquisitions and buybacks; the offering includes scenario analysis ranging from “Sovereign Tech” (AI as a high‑margin utility) to “Obsolescence Trap” (infrastructure becoming worthless), positioning the debt as a long‑term hedge against technology risk[5].