Alphabet has returned to the US bond market with a $25 billion sale of investment-grade debt, an operation that drew peak demand of roughly $115 billion and ranks among the most sought-after AI-linked deals of the year.

The offering, structured in up to ten tranches with maturities ranging from two to forty years, benefited from more generous yield premiums than the average for the high-grade segment, allowing the spread on the longest tranche to tighten to 1.3 percentage points over Treasuries, down from the 1.55 points initially indicated.

The result comes just weeks after the group — the parent of Google and YouTube — raised its 2026 capital-expenditure guidance to as much as $205 billion, more than double the prior year, triggering a sell-off in AI-linked debt and fueling doubts about how quickly infrastructure investments of this scale can be monetized.

Ever more bond issuance

The decision to tap the debt market again marks a strategic shift for the big technology companies, which in the past financed their expansion almost entirely from their vast cash reserves. Over the course of 2026, the hyperscalers — including Amazon, Alphabet, Meta Platforms and Oracle — have already issued roughly $194 billion in bonds in the first seven months, a 79% increase over all of 2025.

Big Tech’s total AI-related spending is estimated at more than $730 billion this year, a figure that is squeezing cash flows and led Alphabet to post its first negative free cash flow since its 2004 stock-market debut in the second quarter. August’s sale, which brings the total debt the group has placed since 2025 to more than $114 billion, cements Alphabet’s position as the leading issuer of AI-linked bonds and signals its intention — communicated to investors through its dealers — to come to the US market twice a year, a message meant to reassure them about the predictability of future supply.

Market conditions proved more favorable than in previous weeks. After demand cooled in July — when a deal tied to a Meta Platforms data center handled by a vehicle linked to BlackRock drew tepid initial interest and Amazon’s offering met a weak reception — investors responded forcefully to Alphabet’s sale.

Can the market absorb this much debt?

The $115 billion in demand sits just behind the records set by Oracle’s deal in February, at $129 billion, and Amazon’s in March, at roughly $126 billion. The banks that managed the sale — Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley and Wells Fargo — were able to count on higher-than-usual premiums, up to 40 basis points over the company’s existing debt, a concession made necessary in an environment where appetite has softened, as Tony Trzcinka of Impax Asset Management noted.

The deal is part of an unprecedented investment cycle centered on building data centers, server capacity and the semiconductor infrastructure needed to support the Gemini models and cloud services. While the strength of Alphabet’s credit profile continues to attract institutional capital, questions are emerging about the long-term sustainability of a technological arms race that risks generating overcapacity or delayed returns.

The market, however, appears to have absorbed some of these concerns: second-quarter results from the main hyperscalers showed that the spending is beginning to pay off, bolstering confidence and allowing spreads to stabilize. Alphabet had already placed $20 billion in February, drawing more than $100 billion in demand, and had subsequently explored alternative currencies — including Swiss francs, British pounds, euros, Canadian dollars and Japanese yen — alongside an equity issuance of nearly $85 billion that saw participation from Berkshire Hathaway.

Editor’s note

This article was originally published in Italian on money.it by Redazione Money Premium on August 07, 2026 as «Due emissioni l’anno e scadenze fino a 40 anni. L’AI costa sempre di più a Google». It has been translated and adapted for an international audience by the Money.it International desk.