In an extraordinary financial move reflecting the company's significant investment in the future of technology, Alphabet, the parent company of search giant Google, plans to issue rare bonds maturing in 100 years. This bold step comes as the company seeks to raise a massive $20 billion in funding to bolster its enormous investments in the infrastructure needed for the escalating race for artificial intelligence.
According to Bloomberg reports, a significant portion of this funding will come from a bond issuance maturing in February 2126, known in financial circles as "bonds of the century." This move represents a clear demonstration of Alphabet's confidence in the sustainability of its business model and its ability to generate long-term returns, allowing it to secure fixed-cost funding to meet the unprecedented capital expenditures required for developing generative artificial intelligence.
General context: The arms race in the world of artificial intelligence
Competition in the technology sector is no longer limited to launching new products; it has transformed into a veritable arms race in the infrastructure field. Since the launch of ChatGPT by Microsoft-backed OpenAI, competition has intensified among tech giants like Google, Amazon, and Meta. Running and training advanced AI models requires immense computing power, necessitating the construction and equipping of massive data centers that consume vast amounts of energy and rely on thousands of sophisticated electronic chips.
In this context, Alphabet's spending on computing infrastructure surged to $91 billion last year, and financial analysts predict it will reach between $175 billion and $185 billion this year. This escalation in spending is placing significant strain on the company's finances, even with its massive advertising revenue, making access to debt markets a strategic option for spreading costs over the long term.
The importance of the step and its expected impact
At the local level, the company's century bond issuance provides substantial and stable cash flow, giving it the flexibility to plan long-term projects without worrying about short-term market volatility. Regionally, in Silicon Valley, this move raises the bar for competition and forces other companies to reassess their financing strategies to keep pace with the scale of the spending.
Internationally, this investment reinforces the United States' position as a global leader in artificial intelligence. Dominance in this sector translates not only into economic supremacy but also into strategic and geopolitical influence. While "century bonds" are not historically unprecedented—major corporations like Disney and Coca-Cola used them in the 1990s to capitalize on low interest rates—their resurgence in the context of artificial intelligence suggests we are witnessing a historic investment cycle that will reshape the global economy for decades to come.
