Alphabet is selling a rare 100-year sterling bond this week alongside $15 billion in dollar bonds and additional Swiss franc debt, marking an unprecedented financing move as the Google parent company scrambles to fund its explosive AI infrastructure buildout.
The century bond—a financing instrument so unusual that only three entities have ever issued one in the sterling market—represents a dramatic escalation in how Big Tech is approaching the AI arms race. While IBM issued a similar instrument back in 1996, the tech sector has largely avoided such extreme long-term borrowing, typically capping debt maturities at 40 years. That Alphabet is now willing to lock in financing for an entire century reveals just how fundamentally the company views AI as reshaping not just its business model, but the entire landscape of computing.
The numbers behind this bond sale are staggering. Alphabet plans to spend up to $185 billion on capital expenditure in 2026—roughly double last year’s total and representing a 97% year-over-year increase from $92 billion in 2025. The company’s long-term debt has already jumped to $46.5 billion in 2025, more than quadrupling from the previous year. These latest bond sales will push that figure even higher as Alphabet joins Amazon, Meta, Microsoft, and others in what amounts to a $655 billion collective bet on AI infrastructure this year alone.
The Century Bond Gamble
A 100-year bond is financial engineering at its most audacious. By borrowing money that won’t need to be repaid until 2126, Alphabet is making a statement that transcends typical corporate finance strategy: the company believes AI infrastructure will generate returns not just for years or decades, but for generations.
This represents a fascinating paradox. Technology moves at breakneck speed—the iPhone is less than 20 years old, Google itself is barely 27. Yet here is one of the world’s most innovative companies issuing debt with a maturity that extends beyond any conceivable planning horizon. It’s a bet that whatever AI becomes, whatever forms it takes, whatever applications emerge that we cannot possibly imagine today, the infrastructure being built now will remain foundational.
The timing is particularly revealing. Century bonds typically emerge during periods of exceptionally low interest rates, when borrowers can lock in cheap financing for the long term. Although we’re no longer in the near-zero rate environment that followed the 2008 financial crisis, Alphabet clearly believes current rates are attractive enough to justify century-long obligations. The 40-year dollar bond in Monday’s offering was expected to yield just 1.2 percentage points above US Treasuries—a remarkably tight spread that reflects both Alphabet’s creditworthiness and investor appetite for long-dated tech debt.
AI’s Unique Capital Intensity
What makes this financing spree particularly noteworthy is AI’s unique position in the history of technological innovation. Unlike previous computing paradigms—personal computers, the internet, mobile—AI requires massive upfront capital expenditure before generating revenue. Training frontier AI models demands specialized chips, enormous data centers, sophisticated cooling systems, and vast amounts of energy. The infrastructure must exist before the product can.
This inverts the typical tech startup model of capital efficiency and rapid iteration. You cannot build a competitive large language model in a garage. You cannot bootstrap your way to state-of-the-art AI capabilities. The barriers to entry are measured in billions of dollars, and the competitive dynamics reward scale in ways that previous technology waves did not.
Alphabet’s financing strategy reflects this reality. The company reported annual sales topping $400 billion for the first time, with strong cash flow and $126.8 billion in cash and equivalents at year-end. Yet even with these formidable resources, management is turning to debt markets rather than funding AI expansion purely from operating cash flow. This suggests the scale of required investment exceeds even Google’s substantial organic cash generation.
The company is not alone. Oracle recently raised $25 billion from a bond sale that attracted more than $125 billion in orders—a 5-to-1 oversubscription ratio that demonstrates investor enthusiasm for financing the AI buildout. Amazon, Meta, and Microsoft have all increased their capital expenditure plans, with spending growth ranging from 41% to 73% year-over-year. The collective message is clear: AI infrastructure requires capital deployment at a scale that challenges even the largest, most profitable technology companies.
Market Implications and Risks
The AI infrastructure boom is creating a fascinating dynamic in capital markets. On one hand, investors are clearly willing to finance these massive expenditures, as evidenced by the strong demand for tech debt offerings. The oversubscription of Oracle’s bond sale and Alphabet’s ability to issue across three currencies simultaneously suggest confidence in AI’s transformative potential.
On the other hand, this capital-intensive race raises legitimate questions about sustainability and returns. The companies spending the most on AI infrastructure—Amazon’s $200 billion, Google’s $180 billion, Meta’s $125 billion, Microsoft’s $117.5 billion—are engaged in what amounts to a high-stakes poker game. Each must continue investing or risk falling behind, yet the ultimate payoff remains uncertain.
The risk of capital misallocation is real. Not every AI application will justify the infrastructure supporting it. Not every data center being built today will operate at full capacity. And as models become more efficient or architectural approaches evolve, some of this infrastructure may become obsolete faster than its financing suggests.
Yet the alternative—sitting out the AI revolution—appears even riskier to these companies. In a world where AI capabilities increasingly differentiate products and services, where computational power translates directly to competitive advantage, under-investment could prove fatal. This creates a classic arms race dynamic where rational individual decisions (invest heavily or fall behind) could lead to potentially irrational collective outcomes (industry-wide over-investment).
A Generational Bet
Ultimately, Alphabet’s century bond represents more than just a financing decision. It’s a philosophical statement about AI’s permanence and importance. By borrowing money that won’t mature until the 22nd century, Google is declaring that AI infrastructure is as foundational to the future as roads, bridges, and power grids have been to the industrial age.
This may prove prescient or hubristic. We won’t know for decades whether today’s AI infrastructure spending represents visionary investment or one of technology’s great capital misallocations. But the willingness of one of the world’s most sophisticated technology companies to lock in financing for 100 years tells us something important: the people closest to AI’s development believe we’re witnessing a fundamental shift in how computing works and what technology can do.