Alphabet Eyes Australia Bond Market Amid Massive AI Debt
Alphabet's parent company, Google, has already borrowed billions for its AI investments and now it's reportedly eyeing Australia's bond market. The tech giant hired bankers to issue dollar bonds in the region, which would be its first offering of Australian dollar bonds. The company may sell notes with maturities ranging from 4 to 20 years, according to a statement from Australia & New Zealand Banking Group.
This move comes as US tech firms flood credit markets with debt to fund their investments in AI. Big Tech companies like Meta Platforms and Amazon.com have raised hundreds of billions of dollars this year. Alphabet itself priced $25 billion of bonds in the US dollar market earlier this month and has issued notes in several other currencies.
The company's huge investments in AI are fueling a debate about whether the firms can generate profits from those investments, despite higher yields. Some analysts are cautioning that the tech giants may struggle to turn a profit on their massive AI expenditures.
Berkshire Hathaway, led by Warren Buffett, is one of Alphabet's largest shareholders, with almost 106 million shares worth around $36.6 billion. The investment firm's stake in Alphabet has made it the third biggest holding in Berkshire's equity portfolio, ahead of Coca-Cola but behind Apple and American Express.