Alphabet taps Aussie debt market with A$5bn raise for AI acceleration

Alphabet is turning to Australian investors for the first time, marketing a debut Australian dollar bond deal as the Google parent steps up borrowing to support its huge AI spending plans.

The company is looking to raise about A$5 billion (US$3.6 billion), according to people familiar with the matter. The deal will include four maturities, with the longest running for 20 years.

Alphabet makes Australian debt debut

The bond sale marks Alphabet’s first entry into Australia’s dollar debt market, commonly known as the Kangaroo bond market.

ANZ is among the banks involved in the offering.

The Australian market has become increasingly attractive to international borrowers. Overseas companies are issuing debt at a record pace this year, helped by strong demand from both local and international investors.

That demand is allowing companies to raise larger sums and lock in funding for longer periods.

AI bill pushes borrowing higher

Alphabet’s move comes as the cost of building its AI infrastructure continues to climb.

The company last month lifted its capital spending forecast to as much as US$205 billion for the year. That has intensified investor questions over how Alphabet and other Big Tech companies will turn their massive AI investments into profits.

Alphabet has already raised money in several overseas markets this year, selling bonds in Swiss francs, British pounds, euros, Canadian dollars and Japanese yen.

Big tech leans on debt to fund AI

Alphabet is now one of the biggest US corporate borrowers in global debt markets this year, behind only Amazon in tapping debt markets to support AI ambitions.

The fundraising comes at a time when investors are becoming more selective. Companies are facing greater scrutiny over how much they are spending on AI and whether those investments can eventually deliver sustainable returns.

For Alphabet, the Australian bond market offers another funding channel as the company races to expand its AI capabilities and infrastructure.