Alphabet Inc. is looking to raise as much as $25 billion from its latest US investment-grade bond offering, a deal that will test investor appetite for AI-related debt following a July selloff.
No final decision has been made on the size, according to people familiar with the matter, asking not to be identified as they’re not authorized to speak publicly.
The Google and YouTube parent is offering notes in as many as 10 parts, with maturities ranging from two to 40 years, a separate person said. Initial price talk for the longest-tenored tranche is a premium of about 1.55 percentage points above Treasuries.
Initial discussions for the tranches involve premiums of as much as 0.4 percentage point to existing Alphabet debt, a more generous concession than is typically seen in the investment-grade bond market. Most high-grade bond deals do see pricing tighten during the sale process.
“These deals need higher concessions due to investor appetite softening,” said Tony Trzcinka, a portfolio manager at Impax Asset Management. “Market execution will test whether they can pull off tighter spreads without sweetening the terms.”
Bank of America Corp., Citigroup Inc., Goldman Sachs Group Inc., JPMorgan Chase & Co., Morgan Stanley and Wells Fargo & Co. are managing the sale, the person added. All the banks but Goldman Sachs declined to comment. Goldman and Alphabet didn’t immediately respond.
See more: Is the Bond Market Putting Warsh in a Corner?
Alphabet’s offering comes two weeks after the company’s raised 2026 spending outlook helped trigger fresh worries about whether massive artificial-intelligence investments will pay off.
Investor appetite for bonds to help fund those expenditures cooled in July as Alphabet increased its forecast to as much as $205 billion, more than double 2025’s outlays.
A BlackRock Inc.-linked firm last week sold $12.5 billion of bonds tied to a Meta Platforms Inc. data center project in Texas. Early demand was lackluster and the deal was a rare high-grade one to price at initial talk. That followed soft interest for an offering by Amazon.com Inc and spreads widening in the secondary market for newly issued AI-related notes from firms including SpaceX.
But the environment improved as August began, helped by gains in US Treasuries.
“We’ve had a few days now of positive reactions from investors across corporates and especially technology,” said Brett Kozlowski, portfolio manager at GW&K Investment Management. “But another large debt deal will still test the depth of that and be worth watching.”
Alphabet, which sold more than $50 billion of debt in the first half of 2026, and Amazon have led the AI-infrastructure borrowing spree. Alphabet last tapped the US high-grade debt market in February, before selling bonds in Swiss francs, British pounds, euros, Canadian dollars and Japanese yen. It also issued nearly $85 billion of shares two months ago.
Capital spending contributed to Alphabet posting its first quarter of negative cash flow since its 2004 initial public offering.
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