Alphabet Inc. is looking at selling about $15 billion of bonds in the US, and launched the sale of €6.5 billion ($7.48 billion) of notes in Europe, adding too a wave of borrowing from technology companies as they invest aggressively in artificial intelligence.
The tech giant is looking at selling bonds in the US in as many as eight parts,ranging from three to 50 years,according to people with knowledge of the matter. The longest portion of the offering may yield around 1.35 percentage points more than Treasuries, said the person, who asked not to be identified as the details are private.
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The Google parent’s euro-denominated bond sale is €250 million more than had been expected. The debt sales are the company’s first since April, when it also tapped markets on both sides of the Atlantic.
Alphabet’s earnings showed surging demand for cloud and AI services. Its latest bond sales come just days after Meta Platforms Inc. sold $30 billion of notes in the biggest dollar-bond offering of the year.
Technology companies’ bet on a future powered by gigantic data centers filled with humming servers has supercharged spending on AI. Morgan Stanley expects big firms known as hyperscalers to spend about $3 trillion on infrastructure such as data centers between now and 2028, with roughly half of that funded through cash flows.
The surge in borrowing is already showing signs of weighing on corporate bond valuations. The average US high-grade spread rose 0.02 percentage point, or 2 basis points, to 78 basis points on Friday, according to Bloomberg index data.
Issuance will likely remain active in early November, partly as a series of frequent issuers haven’t yet come to market and may look to issue before the end of the year, JPMorgan Chase & Co. credit strategists including Eric Beinstein and Nathaniel rosenbaum wrote in a note Monday.
“There is room for spreads to widen a little bit more as investors think about