Some investors skipped a recent bond offering because yields were insufficient and because of concerns about overexposure to hyperscalers' capital expenditure budgets and complex AI-linked financial obligations. Big Tech firms and their suppliers are set to invest nearly $700 billion in AI infrastructure this year and are increasingly accessing debt markets to fund large data centre build-outs. Recent large bond sales include Alphabet's $17.5 billion US issuance with a 50-year bond and Oracle's $25 billion sale that drew massive demand. Alphabet reported over $400 billion in annual sales and plans up to $185 billion in capex this year, while its long-term debt rose to $46.5 billion and year-end cash stood at $126.8 billion. Investor demand showed strongest appetite for short-dated maturities, with three-year pricing tightening notably over Treasuries.
"Big Tech companies and their suppliers are expected to invest almost $700 billion in AI infrastructure this year and are increasingly turning to the debt markets to finance the giant data centre build-out. Alphabet in November sold $17.5 billion of bonds in the US including a 50-year bond-the longest-dated dollar bond sold by a tech group last year-and raised €6.5 billion on European markets. Oracle last week raised $25 billion from a bond sale that attracted more than $125 billion of orders."
"Last week, Google's parent company reported annual sales that topped $400 billion for the first time, beating investors' expectations for revenues and profits in the most recent quarter. It said it planned to spend as much as $185 billion on capex this year, roughly double last year's total, to capitalize on booming demand for its Gemini AI assistant."
Read at Ars Technica
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