Technology firm Alphabet has tapped the bond market to fuel its AI boom, as per a Reuters report.
While the report could not be verified, estimates peg the total amount to be raised at $15 billion. The size of the bond sale has not been disclosed as of yet. The bonds are expected to be structured in seven tranches.
Alphabet is the parent company of Google, which right now is considered a leader in the race to AI dominance, with multiple integrations of AI tech across its services.
The longest known part of the bond sale will mature in 2066, with a premium of 1.2% above treasury yields, according to Bloomberg.
Tech companies are turning to bond markets to help raise capital for what they think will be part of the next industrial revolution. Oracle has $18 billion worth of bonds outstanding and last year secured more financing of $38 billion through loans.
The update comes after Alphabet posted its Q4 earnings, showing record annual revenues of $400 billion and significant capital expenditures towards AI infrastructure and AI services development.
Other companies contributing to the wave of bond financing for AI-related projects include Meta, Alphabet, Amazon, and Microsoft, all of whom turned to the bond market for tens of billions of dollars.
Sizeable returns are yet to present themselves, and hyperscalers—firms investing heavily in AI infrastructure—are committing billions of dollars for development, with huge expectations in revenues and demand forming the basis for investment.
At the time of writing, Alphabet shares were trading at $327.20, up by 1.27%.