Imagine waking up in 2126, and despite a century of technological evolution, you still find yourself typing queries into a Google search bar. It sounds surreal, yet Bond investors aren’t just imagining it—they’re betting on it. Alphabet, Google’s parent company, is selling 100-year bonds as part of a colossal debt initiative aimed at funding a vast AI expansion.
A recent Bloomberg report details how Alphabet has secured an astonishing $32 billion through multi-currency bonds—IOUs that promise returns with interest. This includes $20 billion in U.S. dollar bonds sliced into seven different tranches with varying maturity dates. Some repayments will come due in as little as three years, while others stretch to a daunting 40 years. That timeframe is still shorter than Trump’s proposed 50-year mortgages, yet it reflects a long-term vision.
The bond sale attracted a flood of interest, exceeding expectations. Alphabet set out to raise $15 billion through its U.S. dollar bonds but ended up pulling in an extra $5 billion due to overwhelming demand. Surprisingly, the terms also shifted favorably for Alphabet. The three-year bonds are expected to yield only 0.27% more than U.S. Treasuries, long considered among the safest bets. Even the 40-year bonds clock in at just 0.95% above Treasuries. Investors seem to believe that choosing Google carries risks on par with investing in U.S. government bonds. And, who can blame them?
Yet, the issuance of a 100-year bond is an exceptionally rare gamble. Alphabet’s offering, priced in UK sterling, stands at £1 billion (approximately €1.17 billion). Strikingly, the interest rates for this century bond are shaping up to be more advantageous than some other options. As reported by Bloomberg, it’s pegged at about 1.2% above the projected return on a century-long UK government bond. The markets appear to think Google is just a hair’s breadth away from outlasting the British Empire.
Such a long-term investment is fraught with uncertainty, especially for a tech company that dwells in a sector rife with rapid innovation. Relying on any corporation to endure a century feels akin to betting on a single horse in an ever-changing race.
For context, Bloomberg highlights that no tech company has opted to issue a 100-year note for nearly 30 years; Motorola’s venture into this arena back in 1997 ended abruptly. Once among the top 25 most profitable firms in America, Motorola soon found itself overtaken by Nokia and now languishes far from the spotlight. The very bonds that were touted as groundbreaking now trade for just 80% of their face value, a stark reminder of the impermanence in tech.
Who, then, is gambling on Google to avoid Motorola’s fate? Primarily, it’s insurance companies and pension funds that are putting their chips on the table, as Bloomberg notes. Yes, that’s your retirement savings submerging into this ambitious bet.
But Google isn’t alone in leveraging other people’s money to fund its ambitious AI infrastructure. Earlier this year, Oracle finalized a $25 billion debt sale, with the top five AI hyperscalers—Alphabet, Amazon, Meta, Microsoft, and Oracle—issuing a staggering $121 billion in corporate bonds. All this capital is earmarked for building data centers and enhancing AI capabilities, with over $500 billion pledged this year by these giants.
This is a jaw-dropper of an investment scheme. What happens if things go sideways? Are we prepared to entrust the future with a hefty sum of our collective financial security?