Google issues 100-year bonds to boost AI investments
Alphabet, which owns Google, intends to issue bonds maturing after 100 years, as part of enhancing its huge investments in the field of artificial intelligence infrastructure, according to data published by Bloomberg on Tuesday.
The giant company in total aims to raise about $20 billion, a large part of which through issuing bonds maturing in February 2126, with lenders keen to benefit from the artificial intelligence revolution.
Alphabet did not respond to a request for comment.
Alphabet is investing with… Its competitors, such as Amazon, Meta, and Microsoft, invested huge sums in the infrastructure supporting artificial intelligence technology.
However, market reactions were mixed, as some investors expressed concern that spending exceeded the reasonable limit.
Issuing 100-year bonds is rare, especially for Alphabet, which has huge advertising revenues that enable it to finance its investments instead of resorting to borrowing.
But the intense competition for leadership in the field of artificial intelligence has changed the rules. The game, which necessitated unprecedented spending on data centers, power generation, etc.
Alphabet allocated $91 billion to spending on computing infrastructure last year, and informed financial analysts that it expected to spend between $175 and $185 billion on this sector this year.
To confront this significant increase in spending, Alphabet resorted to increasing its long-term debt, so late last year it issued 50-year bonds.
Although century bonds are not new, American companies have not resorted to them for decades.
Companies such as Disney, Coca-Cola, FedEx, Ford, and Motorola resorted to this type of long-term debt during the 1990s.
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