--- title: "Ignoring AI CapEx Concerns! Alphabet Plans $25 Billion Bond Issuance as Long-End Treasury Yields Surge" type: "News" locale: "en" url: "https://longbridge.com/en/news/295108391.md" description: "Alphabet plans to raise up to $25 billion through bond issuance, triggering a rise in long-end US Treasury yields and a steepening of the yield curve. Although it intends to significantly increase its 2026 capital expenditures to $205 billion, massive spending has already turned free cash flow negative. Under the combined influence of Federal Reserve rate hike expectations and cooling demand for AI-related bonds, market absorption pressure has risen significantly" datetime: "2026-08-06T17:44:05.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/295108391.md) - [en](https://longbridge.com/en/news/295108391.md) - [zh-HK](https://longbridge.com/zh-HK/news/295108391.md) --- # Ignoring AI CapEx Concerns! Alphabet Plans $25 Billion Bond Issuance as Long-End Treasury Yields Surge Alphabet is seeking to raise up to $25 billion through a new round of US dollar investment-grade bond issuance. This move not only tests investors' true appetite for AI-related debt but also directly pushes up long-end US Treasury yields, putting pressure on the market. According to reports on the 6th citing insiders, Alphabet's bond issuance is split into 10 tranches, with maturities ranging from 2 to 40 years. The initial price guidance spread for the longest-dated tranche is approximately 155 basis points above US Treasuries. The final issuance size has not yet been determined. Affected by this news, US Treasury yields rose across the board by 3 to 4 basis points, with long-term bonds leading the decline. The 10-Year Treasury Yield rose to about 4.65%, and the 2s10s and 5s30s term spreads both widened to their widest levels of the day. The timing of this bond issuance is quite sensitive. Just about two weeks ago, **Alphabet raised its 2026 capital expenditure forecast to a maximum of $205 billion, more than double the spending scale of 2025, reigniting market doubts about the return on AI investments.** Meanwhile, short-end US Treasuries are under another layer of pressure: According to the UK's Financial Times, if Federal Reserve Chair Walsh sees hotter-than-expected inflation data in the coming weeks, he will be prepared to raise interest rates at the September meeting. Following the report, short-term US Treasury yields rose in tandem. ## Cooling Demand for AI Bonds, Rising Market Absorption Pressure Alphabet's bond issuance is proceeding against a backdrop of cracking investor confidence amidst financing demands for AI infrastructure. Last week, a company affiliated with BlackRock issued $12.5 billion in bonds for Meta Platforms' data center project in Texas, seeing lukewarm initial demand. Previously, Amazon's related bond issuance also encountered insufficient subscription enthusiasm. New AI-related bond issuances by multiple companies, including SpaceX, have also seen widening spreads in the secondary market. **Since 2025, large technology companies have cumulatively raised over $350 billion through the bond market, with Alphabet and Amazon taking the lead.** Alphabet alone has issued over $50 billion in bonds in the first half of 2026, covering currencies such as the Swiss franc, British pound, euro, Canadian dollar, and Japanese yen, and completed a nearly $85 billion secondary stock offering about two months ago. ## Continuous Expansion of Financing Scale, Free Cash Flow Turns Negative for the First Time Continuously rising capital expenditures have left a clear mark on Alphabet's financial data. Massive capital spending dragged Alphabet into its first quarter with negative free cash flow since its IPO, intensifying market concerns that the "negative cash flow era" for mega-cap technology companies is arriving ahead of schedule. Alphabet simultaneously filed an application to issue up to $40 billion worth of Class A and Class C shares, further expanding its capital reserves to provide ammunition for continued expansion of AI infrastructure investment. In the bond market, the combination of Alphabet's bond issuance plan and the Federal Reserve's potential rate hike expectations constituted a dual driver pressing on US Treasuries that day. Long-end yields were pushed up more significantly by supply pressure, driving an overall steepening of the yield curve. The interest rate market currently still prices in approximately 15 basis points of rate hike expectations for September, with cumulative rate hike expectations reaching about 33 basis points by year-end. Market uncertainty regarding the monetary policy path remains high. For fixed-income investors, finding a balance between the supply shock brought by the expansion of AI capital expenditures and the potential risk of rising interest rates has become a core issue that must be faced. ### Related Stocks - [GOOGL.US](https://longbridge.com/en/quote/GOOGL.US.md) - [GOOG.US](https://longbridge.com/en/quote/GOOG.US.md) - [GOOX.US](https://longbridge.com/en/quote/GOOX.US.md) - [GOU.US](https://longbridge.com/en/quote/GOU.US.md) - [GGLL.US](https://longbridge.com/en/quote/GGLL.US.md) - [GGLS.US](https://longbridge.com/en/quote/GGLS.US.md) - [GOOW.US](https://longbridge.com/en/quote/GOOW.US.md) - [GOOY.US](https://longbridge.com/en/quote/GOOY.US.md) - [GOOP.US](https://longbridge.com/en/quote/GOOP.US.md) - [MAGX.US](https://longbridge.com/en/quote/MAGX.US.md) - [META.US](https://longbridge.com/en/quote/META.US.md) - [AMZN.US](https://longbridge.com/en/quote/AMZN.US.md) ## Related News & Research - [Google is in talks for a $1.5 billion-plus deal with AI coding agent startup Mechanize](https://longbridge.com/en/news/294965617.md) - [Google nixes its Earth AI feature one day after launch, amid criticism it would spread misinformation](https://longbridge.com/en/news/294549600.md) - [ZoomInfo Connector Provides GTM Context Layer for Buyer Intent with Gemini Enterprise | GTM Stock News](https://longbridge.com/en/news/294701412.md) - [PRESS DIGEST-New York Times business news - August 3](https://longbridge.com/en/news/294642651.md) - [DeepSeek's new AI model is by far the cheapest of well-known models to run, research firm says](https://longbridge.com/en/news/294645417.md)