Alphabet seeks $6.7 billion through bond sale amid AI spending concerns
The tech giant's parent company is selling debt following a share-price collapse that reduced its market value by $500 billion.
Alphabet is seeking $6.7 billion from bond investors, according to a report by Reuters cited by the Times of India. The company is selling €6 billion of debt after its market value dropped by approximately $500 billion last week.
The offering follows a period where Alphabet's shares fell more than 12 per cent after quarterly results showed slower growth in Google Search and increased cash burn. Investors have expressed concerns regarding the costs of expanding artificial intelligence (AI) infrastructure and the potential returns on that spending.
The bonds are being sold in seven tranches with repayment periods between two and 19 years. Six tranches have fixed interest rates, while one has a floating rate, according to a US Securities and Exchange Commission filing.
Alphabet stated it will use the proceeds for general corporate purposes, which may include the repayment of existing debt. The filing did not specify that the funds are exclusively for AI projects.
The company expects capital spending to reach up to $205 billion for the full year to fund long-term assets like AI infrastructure. As of September 30, Alphabet had also entered into lease agreements, primarily for data centres, involving $130.5 billion in future payments.
Barclays, BNP Paribas, and Deutsche Bank are managing the offering. This marks the company's second euro-denominated bond sale this year, following a €9 billion sale in May.
