Alphabet issued £1 billion in century bonds, which strategists view as another signal of excessive optimism at the tail end of the credit cycle. As tech giants push borrowing to new highs in the race for AI infrastructure, the risks of debt-driven expansion are raising concerns.
On February 12, Bill Blain, CEO of Wind Shift Capital, stated that due to credit spreads being at historical lows, the long-term demand for data centers is uncertain, and rapid technological changes will inevitably create winners and losers in the industry, this transaction further proves that there is a bubble in the AI market.
This is the first time Google's parent company has ventured into ultra-long-term bonds denominated in pounds, and it is part of its multi-currency financing plan totaling approximately $20 billion. The issuance spans dollars, euros, pounds, and the newly entered Swiss franc, covering multiple maturities. According to Bloomberg citing informed sources, this century bond priced on Tuesday attracted nearly 10 times the subscription, with a coupon 120 basis points above the 10-year UK bond. Alphabet disclosed last week that capital expenditures are expected to reach $185 billion in 2026.
<h2>Market Bubble Signals</h2>
Bill Blain, CEO of Wind Shift Capital, believes that the £1 billion century bond issuance completed by Alphabet this week is the latest proof of the credit market's excessive expansion for AI financing.
In an interview with CNBC, Blain stated that the transaction itself was executed excellently, with Alphabet accurately capturing the structural demand for liability matching from UK insurance and pension funds. However, he also warned that the emergence of such ultra-long-term financing tools, against the backdrop of historically low credit spreads, uncertain long-term demand for data centers, and accelerated technological iterations reshaping the industry landscape, is a typical signal of market bubble accumulation. He said:
<blockquote>
“If you are looking for signs of a market peak, even if this is a perfectly executed transaction, it certainly looks like one.”
</blockquote>
With competitors like Oracle, Amazon, and Microsoft simultaneously increasing infrastructure investments, the total bond issuance by tech giants is expected to approach $3 trillion over the next five years. Strategists point out that the issuance of century bonds also helps Alphabet broaden its institutional investor base beyond traditional lenders.
<h2>Diversifying Funding Sources</h2>
Nachu Chockalingam, head of credit at Federated Hermes London, stated that Alphabet's choice to finance AI capital expenditures in the ultra-long-term pound market aims to precisely match the liability matching needs of UK insurance and pension funds while diversifying funding channels to avoid saturation in the dollar market.
Tatjana Greil Castro, co-head of public markets at Muzinich &amp; Co., emphasized that century bonds impose extremely high requirements on the issuer's long-term survival and continuous innovation capabilities. She pointed out:
<blockquote>
“You are essentially betting that this company can continuously reinvent itself over the next century and beyond, even for governments, such issuances are extremely rare.”
</blockquote>

DTCR

XDAT

GGLS

Alphabet issued £1 billion in century bonds for the first time. Strategists warn that, in the context of historically low credit spreads, uncertain AI demand, and accelerated technological changes, this move is a typical signal of market over-optimism and the accumulation of an AI bubble. This issuance is part of its $20 billion multi-currency financing plan

- Alphabet has issued £1 billion in century bonds, signaling potential excess optimism in the credit cycle as tech giants race for AI infrastructure.  
- Bill Blain, CEO of Wind Shift Capital, links this issuance to a market bubble in AI financing, noting low credit spreads and uncertain data center demands amidst rapid tech changes.  
- The bond attracts near 10x subscription and is part of a $20 billion multi-currency financing plan, aiming to align with UK pension funds' liability matching while diversifying funding sources.

Wallstreetcn

Global X Data Center & Dgtl Infrs ETF

Franklin Exponential Data ETF

Direxion Daily Googl Bear 1x Shares

iShares US Digital Infrastructure and Real Estate ETF

Direxion Semicon Bull 3X

First Trust Index NextG ETF

SPDR S&P Software

Global X Internet

Global X Cloud Computing ETF

Alphabet

Roundhill GOOGL WeeklyPay ETF

iShares Semiconductor ETF

Pacer Data & Infrastructure Real Estate ETF

iShares Expanded Tech Software Sector ETF

Alphabet - C

Proshares Big Data Refiners ETF

VanEck Semiconductor ETF

Direxion Daily GOOGL Bull 2X Shares

Is the AI debt bubble beginning to show signs? Analysts warn: Alphabet's issuance of century bonds may be a "topping" signal for the market