Thinking in centuries
The decision of Alphabet, the parent company of Google, to issue a 100-year bond is a striking sign of just how far the Artificial Intelligence (AI) investment cycle has evolved. This isn’t a short-term trend anymore. Building AI scale now requires enormous, long-lasting infrastructure – and investors are willing to fund it.
Demand was exceptional. The company’s $20bn US dollar bond attracted more than $100bn of orders, while its £750m sterling bond drew close to £5.75bn in demand. It is the first time a major technology company has issued a century-long bond since Motorola in 1997, highlighting how rare it is for investors to back a technology firm for an entire century.
The backdrop is Alphabet’s rapidly rising spend on AI infrastructure. Management expects capital expenditure of $175-185bn in 2026, almost double 2025 levels. Last year alone, Alphabet spent nearly $91bn on computing infrastructure. Analysts think the big cloud providers could collectively borrow $400bn in 2026 to fund new data centres, specialised chips, and the energy needed to run increasingly powerful AI models. These are assets built to last decades, and now Alphabet is matching them with equally long-term funding.
From a financial perspective, the move is straightforward. Ultra-long, fixed-rate borrowing spreads out repayment obligations, locks in low funding costs, and allows inflation to gradually reduce the real value of future interest payments. Issuing in sterling and Swiss francs also helps attract long-term investors such as insurers and pension funds. For projects where the financial benefits may take many years to appear, relying only on equity would be expensive. Long-dated debt helps lower Alphabet’s overall cost of capital while keeping more upside for shareholders if the long-term plan succeeds.
Oracle offers an interesting point of comparison. Its recent $25bn bond issue – the largest technology deal of the year – focused on more traditional maturities and one currency. That suits the shorter-term expansion of its cloud business rather than securing funding for several decades. Alphabet is taking a more structural, long-term approach by building a multi-currency program anchored by a 100-year bond aimed at investors who think beyond the usual corporate timeframe.
Still, borrowing for a century isn’t without risk. Corporate history shows that even well-known companies can decline. J.C. Penney issued a 100-year bond in 1997 but filed for bankruptcy within 23 years. Motorola, the last technology company to issue a bond of this length, is a fraction of its former size. Even household names like Disney, Coca-Cola, and IBM have gone through long periods of stagnation. Investors’ willingness to underwrite 100-year corporate debt today signals confidence, but also a level of optimism that should be treated carefully.
That caution is warranted. Alphabet’s spending plans are extremely capital-intensive, and large borrowing rounds can affect even highly rated companies. Revenues may grow more slowly than the infrastructure build-out, creating pressure on cash flow. Furthermore, given the speed of improvement in AI, there’s a chance that some of today’s assets may not deliver value for as long as planned. Historically, century bonds have often appeared in periods of strong market optimism, another reminder that very long-term investments come with meaningful uncertainty.
Howard Marks, of Oaktree Capital Management, recently noted that even breakthrough technologies can destroy investor capital if not managed well. Bondholders simply collect fixed coupons, while equity holders face more volatility but also benefit the most if things go right. Alphabet’s decision reflects this trade-off: bond investors accept capped returns to help fund long-lived assets, while shareholders take the risk – and potential reward – of AI’s long-term growth path.
For long-term investors, the contrast between Alphabet and Oracle highlights a broader point: the AI build-out will create winners and losers not only among companies, but also in how they choose to finance their ambitions. Some businesses can justify borrowing for decades; others may be better off keeping their options open with shorter-term funding. In a market defined by heavy investment and high uncertainty, staying selective and valuation-aware remains essential – focusing on businesses whose long-term plans are genuinely durable rather than merely ambitious. And in a century-long race, who can afford to choose anything less?
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