Alphabet is returning to the debt market to fund its massive push into artificial intelligence. The company plans to raise $20 billion through a new bond sale, which reportedly includes a rare 100-year bond. This move follows a $25 billion debt sale just last November and highlights how quickly Google’s parent company is burning through cash to stay ahead in the tech race.
In its latest annual report, Alphabet did more than just announce new spending; it highlighted significant risks. The company warned that its heavy investments in infrastructure could lead to “excess capacity.” In simpler terms, they might spend billions building data centers they don’t end up using. They also noted that relying on outside partners for these facilities increases costs and makes their operations more complicated.
The price tag for these ambitions is staggering. Alphabet expects its capital expenditures to hit as much as $185 billion this year. That is more than double what it spent in 2025. CFO Anat Ashkenazi claims the company wants to stay “fiscally responsible,” but the quadrupling of its long-term debt tells a story of aggressive growth. When asked what keeps him up at night, CEO Sundar Pichai pointed to “compute capacity.” He isn’t just worried about code; he is worried about finding enough land, electricity, and hardware to meet the “extraordinary demand” for AI.
Alphabet also admitted for the first time that AI could cannibalize its main moneymaker: Google Search. As more people use AI assistants to get direct answers, they may stop clicking on traditional search results. This shift would force the company to reinvent its entire advertising business. While Google’s ad revenue grew by over 13% last quarter, the company told investors there is no guarantee that its new AI ad formats will actually work.
Despite these concerns, Google’s AI tools are gaining ground. The Gemini app now has 750 million monthly users. However, with rivals like Microsoft, Meta, and Amazon also boosting their spending by 60%, Alphabet is locked in an expensive battle where the stakes are higher than ever.
