Alphabet (NasdaqGS:GOOGL) has completed its largest ever bond sale, including a rare 100 year sterling bond, to raise capital for AI infrastructure spending.
The company plans to direct the proceeds toward AI capacity in cloud, search and autonomous driving platforms.
EU regulators have opened a new investigation into Google’s advertising auction practices, adding fresh antitrust scrutiny.
For you as an investor, this combination of large scale debt issuance and heavier AI investment puts a spotlight on how NasdaqGS:GOOGL funds its core growth engines, from Google Cloud to search and YouTube, alongside bets in autonomous driving. It also comes at a time when AI infrastructure spending is a key theme across big tech, with capital needs rising and competition for computing power staying intense.
At the same time, the new EU probe into advertising auctions keeps regulatory risk firmly in view, especially around how Google operates its core ads business. That mix of higher financial commitments and ongoing antitrust pressure may shape how you think about the company’s balance between growth opportunities, capital structure and legal exposure over the long term.
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Alphabet’s record bond sale adds a sizeable layer of fixed-rate debt with very long maturities, from 2026 through to the new 100 year sterling notes due 2126. Coupons in the 4.1% to 6.1% range lock in known interest costs and, because the bonds are senior or senior unsubordinated unsecured, they sit high in the capital structure. For you, the key question is how this extra leverage supports the planned US$175b to US$185b of AI-related capital expenditure while still preserving balance sheet flexibility. The company is also layering in some subordinated debt, which can absorb losses ahead of senior creditors and gives Alphabet room to keep senior credit metrics stronger. The use of callable structures means management has the option to refinance or retire parts of this debt if conditions change. At the same time, the fresh EU probe into ad auction pricing targets the core cash engine that services this new interest burden. If regulatory outcomes affect advertising economics, that would directly matter for how comfortable you feel with higher long-term leverage tied to AI infrastructure, especially versus peers like Microsoft and Amazon that are also leaning on debt markets.
The large multi currency bond program directly supports the narrative’s AI and cloud expansion catalyst by providing long dated funding for data centers, custom chips and Waymo infrastructure without drawing down existing cash.
The EU investigation into ad auctions feeds into the narrative’s regulatory risk theme, as any change to search advertising pricing or auction mechanics could affect the very cash flows that underpin the new debt load and AI spending plans.
The use of a 100 year sterling bond and subordinated notes, plus the sheer size of the issuance, introduces funding structure details that go beyond the narrative’s focus on capital expenditures and could alter how you think about long term balance sheet risk.
Heavier reliance on fixed income markets and very long duration debt raises interest and refinancing risk if future cash flows from search and YouTube do not track the scale of AI capital spending.
The EU ad auction probe adds to existing antitrust and regulatory pressures, and any adverse finding could affect pricing power in core advertising, which services interest on this new debt.
Access to £ and US$ funding across the curve at fixed coupons provides financial flexibility to pursue large AI infrastructure projects without immediate equity dilution or full reliance on internal cash generation.
A mix of senior, subordinated and guaranteed notes, much of it callable, gives Alphabet levers to manage its capital structure over time as AI related businesses such as Google Cloud and Waymo develop.
From here, it is worth watching how Alphabet’s net debt and interest expense trend relative to operating cash flow as the AI capex plan rolls out, and whether management updates any leverage or rating targets. On the regulatory side, keep an eye on milestones in the EU ad pricing investigation and whether there are changes to auction design or disclosures that could influence ad yields. Comparing Alphabet’s funding approach and balance sheet ratios with peers like Microsoft, Amazon and Meta can also help you judge whether this record bond sale leaves the company conservatively or aggressively positioned for the next phase of AI infrastructure build out.
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Companies discussed in this article include GOOGL.
