Alphabet becomes first tech company to issue 100-year bonds in nearly three decades.
See full article...
See full article...
Alphabet selling very rare 100-year bunds to help fund AI investment
- Thread starter JournalBot
- Start date
Why not go all the way and sell perpetual bonds? It's highly unlikely that Sundar will be around to see the bond redemption date anyway.
Upvote
200
(201
/
-1)
Upvote
140
(163
/
-23)
Statistical
Ars Legatus Legionis
That is actually pretty solid. 40 years is a bit more useful for someone like me looking at early retirement than 100 year bond. 30 year treasury (I assume the 30 is the reference because there is nothing longer) is yielding 4.8% so we are talking about ~5.7% for 40 years. Would be nice if it was 5.7% for 40 years in Swiss Francs to hedge dollar decline but can't have everything.
The bad news is the declining gap between high grade corporates and treasuries likely has more to do with falling confidence in treasuries than rising confidence in corporates.
Last edited:
Upvote
166
(167
/
-1)
infernal666
Ars Praefectus
Any one one who buys this and thinks they are getting any of their money back is a fool.
Upvote
87
(118
/
-31)
Statistical
Ars Legatus Legionis
IBM is still around and quite profitable. Given the sheer number of other companies that don't survive to be a century old and still profitable that likely is a poor example.
Upvote
210
(212
/
-2)
This is more alarming. Bubbles tend to transition from "idiot FOMO investors lose their shirts, haha" to "everybody loses their shirts, oh shit" once huge amounts of debt and leveraged investments get involved.
Flashbacks to AIG in 2008. Hopefully the bubble popping doesn't result in a bunch of life insurance companies and pension funds going bankrupt.
Upvote
198
(199
/
-1)
My only concern is that there's a shell company who gurantees the bond and not Google themselves. So if the investment turns sour, they'll collapse the shell company and wipe you out.
I believe Meta or Oracle is doing something like this on their AI bonds. Yes 5.7% yield from Google would be nice but only if they're the ones backing it.
Upvote
156
(162
/
-6)
And here I thought 'longtermism' mandated weird cult sci-fi. This seems way too banal.
Upvote
12
(14
/
-2)
"The problem with capitalism is that you eventually run out of other people's money."
Upvote
205
(218
/
-13)
Statistical
Ars Legatus Legionis
Not sure what you mean by shell company. Alphabet is the debtor. That is google. They just felt the need to rename once they expanded beyond search. All existing "google" debt is alphabet debt.
Upvote
62
(67
/
-5)
Alphabet is also quite profitable. Why aren't they funding the AI themselves? I can understand Oracle and the AI startups borrowing to cover costs, because they have no cash. Alphabet is sitting on plenty of money; cash on hand for the quarter ending December 31, 2025 was $126.843B, a 32.6% increase year-over-year.
Upvote
166
(167
/
-1)
Faith based investing? It's highly speculative that LLM based technology (where the vast investments are going) will even be relevant in 20 years. I would expect some kind of breakthrough in AI that makes LLMs quaint (ex. bipolar transistors to MOSFETS).
Upvote
38
(41
/
-3)
Gotta be a little crazy to lock up your money for 40+ years in a bond paying out in USD. The dollar has depreciated significantly in the past year, and that is likely to continue as our debt load takes up an increasing percentage of GDP.
And then buying a bond to fund AI bubble spending, whew.
And then buying a bond to fund AI bubble spending, whew.
Upvote
95
(102
/
-7)
The amount they're planning to invest this year will probably exceed their profits by a fair margin, so borrowing is covering the difference.
Upvote
34
(34
/
0)
Why use your own money when someone will give you their money for basically free. A lot of people worry about debt (and they should) but cash flow is just as if not more important
Upvote
104
(105
/
-1)
That's assuming, of course, that the company will be around and solvent in 40 years to return the principal. That seems inevitable today for Google, but I think an investor looking at GM in 1970 would have never expected them to file bankruptcy within 40 years, either.
With the US national debt well over 100% of GDP and looming problems like the Social Security funding shortfall it's no surprise that confidence in treasuries has declined, but the U.S. government still has an army and the ability to print money...
Upvote
117
(117
/
0)
Statistical
Ars Legatus Legionis
They are expecting it may require more than that and want to lock up the funds now.
I would point out that if they don't need the money or don't need all the money yet the "cash" is actually in treasuries. So unused cash is just costing them the gap between treasury yields and their rate. A gap that has grown smaller with time.
Upvote
42
(42
/
0)
IPunchCholla
Ars Scholae Palatinae
700 billion capex this year on AI? That sounds like a lot. As in $60 for every single person on the planet. But I don’t know anything about it. Is it a lot? Is there a similar capex spend by other industries?
Are we just taking Google’s word on exploding demand? What type of demand? Is it the AI summary, cause they have that in DDG and I don’t use it most the time, or even read it, but I’m a user since it is on by default and I haven’t gotten around to turn it off. Cause that is a weak demand, if it is all “hey here’s a free thing we’re opting you in to.
Edit to remove extra zero. What’s an order of magnitude between friends?
Are we just taking Google’s word on exploding demand? What type of demand? Is it the AI summary, cause they have that in DDG and I don’t use it most the time, or even read it, but I’m a user since it is on by default and I haven’t gotten around to turn it off. Cause that is a weak demand, if it is all “hey here’s a free thing we’re opting you in to.
Edit to remove extra zero. What’s an order of magnitude between friends?
Last edited:
Upvote
73
(73
/
0)
It's not locked up, you can sell it to someone else, like pretty much all bonds.
The risks are related to whether Google will go bust before maturity, and what the currency is going to do.
Upvote
43
(43
/
0)
Statistical
Ars Legatus Legionis
Well yeah there is a risk in anything. The yield over short duration cash is your compensation for risk. Also ideally one wouldn't have their life savings in a single bond. If google defaults then you lose some. Senior bondholders should be able to get something in bankruptcy plus the yield between now and then. It is shareholders who should be worried google is levering up. They are the ones at the bottom of the totem pole if things go south.
I would point out that GM bondholders did quite well in GM bankruptcy. They got equity for their debt. It was existing GM shareholders who were wiped out. Post bankruptcy any bondholder who didn't want to remain a shareholder could sell their shares of "new GM" on the open market. If they held they did very well but I imagine most didn't given they were bondholders for a reason. So again the real entity taking the risk as alphabet leverages up is the shareholders. Absolute priority rule and all that.
Last edited:
Upvote
91
(92
/
-1)
He doesn't care about their redemption. He wants the cash today, with full cognizance Alphabet may not survive to see the redemption anyway.
Upvote
13
(13
/
0)
Upvote
22
(32
/
-10)
This is a direct response to the potential for SpaceX's IPO to suck all the liquidity from the markets.
Upvote
4
(11
/
-7)
Bold of investors to assume Google will exist in a century. Given the demand was so high that Google was able to drop the yield, I suspect many are subtly acknowledging the continued march towards techno-feudalism.
Upvote
14
(18
/
-4)
Yeah, that's ok for bonds but does that even keep up with inflation?
Upvote
16
(18
/
-2)
If it's an individual buying, it's for their kid's kids and they are probably already quite well off. If it's a pension or hedge fund... No idea. Doesn't seem smart to me.
Upvote
4
(7
/
-3)
Average of the last 100 years was 3.3%, so 5.7% would be well above historical inflation rates. Obviously the past does not predict the future, but betting that the next 100 years won't be as bad as the period covering the World Wars isn't ridiculous.
Upvote
34
(37
/
-3)
Sure, but if the dollar continues to depreciate or if we go through another stretch of high inflation, then the market isn't going to cover your par value.
Upvote
20
(20
/
0)
No they do not have to be, it's really in the details (which haven't been published). They could form a company to take on the debt, assets and keep the debt off their balance sheet. This is what I was thinking Meta did (Meta is only behind 20% of their debt for AI datacenter build outs).
https://earthjustice.org/press/2026...households-paying-for-tech-giants-electricity
Anyways small fish should probably avoid and just stick to buying Treasuries.
Upvote
36
(37
/
-1)
Can somebody with knowledge help explain this?
Is this about dodging taxes?
Googles doesn't want to bring all that cash to the usa because they will have to pay taxes on it? Better to issue bonds to build AI than repatriate the cash they have on the books ( in places like Ireland)?
Is this about dodging taxes?
Googles doesn't want to bring all that cash to the usa because they will have to pay taxes on it? Better to issue bonds to build AI than repatriate the cash they have on the books ( in places like Ireland)?
Upvote
-2
(4
/
-6)
If you buy one of those, do you get it on a fancy sheet of paper with cool raised text and a wax seal or something? It could be the one and only item that your hands touch, and that are then touched by a distant descendant some day, woot!
Upvote
8
(9
/
-1)
That's not how insurance works. Premiums are based on loss exposure. Insurance--as defined in standard terms--at best breaks even on the net of premiums and losses over time. Insurance companies are expected to make their money on the float--what they earn investing the pooled premiums reserved against future losses.
Where insurance companies go astray is when they get too aggressive in their risk/reward wagers on their investments (other than dubious underwriting choices).
In the general investment market right now, "AI" capital offerings for smaller firms are having to pay a far higher premium over benchmarks than Alphabet is offering here. Alphabet's size may be buffering them somewhat, but this seems to be a cold calculation to sucker--and I use that term deliberately--normally cautious investors into a dodgy pool.
Upvote
27
(29
/
-2)
There’s a mismatch between buyers and sellers here. Long-term institutional bond buyers aren’t interested in supplying capex cash to FOMO techbros.
Upvote
13
(15
/
-2)
1. You haven't locked up your money for 40+ years. There's this little thing called a secondary market. You have a right to receive the bond payout at the end of the bond period, and you can transfer that right to others by selling them, wait for it, the bond.
2. This isn't paying out in USD. It's a "sterling issuance." It's paid for and paid out in GBP. The currency conversions that are done before and after are other people's choices.
3. Yes, it's apparently for AI bubble spending. If you object to that, staying invested in Alphabet/Google equities is even more risky. So sell, I guess. Or short if you think that you can outlast the exuberance.
The number of people in these comments who don't know how bonds work is, frankly, frightening.
Upvote
57
(65
/
-8)