Record Debt for Computing Power
Amid an unprecedented arms race in artificial intelligence, Alphabet (Google's parent company) has made a strategic decision to significantly expand its debt portfolio. As of August 11, 2026, the company plans to raise between $20 billion and $25 billion through a new bond issuance in the US market. This will be one of the largest corporate offerings of the current year. The company is expected to issue securities in 10 different series with maturities ranging from 2 to 40 years, indicating the long-term nature of the planned investments.
Funding "Hardware" and Refinancing
The proceeds will be used to cover general corporate expenses, but the primary direction of financing is obvious: the construction and modernization of AI infrastructure. In 2026, capital expenditures (CapEx) for tech giants reached a peak, requiring colossal investments in data centers and chips. Additionally, part of the funds will go towards refinancing existing debt. This decision was made just weeks after Alphabet raised its capital expenditure forecast for the second time this year, sparking concern among analysts regarding the rate of return on investment.
Contradictory Data
There is a divergence in estimates regarding the volume and geography of borrowing in the information space. According to the main report prepared for August 2026, the issuance is up to $25 billion in the US market. However, analyzing the context of previous issuances and data from other sources, it can be noted that Alphabet uses a multi-regional strategy. In particular, there were earlier reports of plans to issue bonds in Europe totaling €3 billion (Source ID 2), as well as the issuance of securities in Japanese yen and Swiss francs. The difference in figures ($20-25 billion versus $15 billion in some media headlines) may be due to phased disclosure of information or the difference between the target volume and already confirmed tranches. Nevertheless, the general trend of aggressive borrowing for AI is confirmed by all sources.
Negative Market Reaction and Free Cash Flow
The increase in debt load is occurring against the backdrop of a difficult situation with the company's stock. In the last quarter, Alphabet reported a negative free cash flow for the first time. This came as a shock to investors accustomed to seeing Google as a generator of stable cash. The sharp drop in shares following the increase in the AI spending forecast forced management to seek alternative sources of financing. In early 2026, the company already raised nearly $85 billion through a stock offering, including investments from Berkshire Hathaway, but this proved insufficient to cover the growing appetite of AI projects.
Industry Trend: The Tech Sector in Debt
Alphabet's situation is not isolated. According to a Reuters analysis based on LSEG data, the technology sector as a whole has shifted to aggressive debt financing. Amazon, Meta*, and Oracle together issued about $194 billion in bonds during the first 7 months of 2026, which is 79% more than in the same period last year. It is projected that major players will spend more than $730 billion on AI in 2026. Even with significant cash flows, companies' own funds are no longer sufficient, making the corporate bond market a key tool for survival in the race for artificial intelligence.
