"Investors Rushed In With Cash"...Google Raises 47 Trillion Won in Just One Day

32 Billion Dollars Raised Through Bond Issuance

Alphabet raised $20 billion through US dollar-denominated bonds and additionally secured $11-$12 billion through British pound- and Swiss franc-denominated bonds. Photo by Getty Images

Alphabet, the parent company of Google, which has signaled large-scale artificial intelligence (AI) investments this year, succeeded in raising 32 billion dollars (about 46.8 trillion won) in just one day through bond issuances in the U.S. and European markets.

According to Bloomberg News and business channel CNBC on the 10th (local time), Alphabet raised 20 billion dollars through U.S. dollar bonds and then additionally secured 11 to 12 billion dollars through British pound and Swiss franc bonds.

A source told CNBC, "Investor demand for high-credit bonds issued by large technology companies leading the AI sector has increased significantly."

In particular, in the British market, the company successfully issued an ultra-long 100-year bond that had drawn considerable attention. It is the first time in about 30 years that a technology company has issued a 100-year bond, following IBM in 1996 and Motorola in 1997.

With this bond issuance, Alphabet is seen as having gained an advantage over its major AI competitors in infrastructure investment. As of the end of last year, it held about 130 billion dollars in cash, and by raising 32 billion dollars through this bond deal, it has come close to its previously announced capital expenditure (CAPEX) outlook for this year of 185 billion dollars.

In its earnings announcement last week, Alphabet stated that it plans to invest up to 185 billion dollars by 2026 to build AI infrastructure. This is more than double last year's level. When combined with major competitors such as Amazon, Meta, and Microsoft (MS), total investment this year alone is expected to reach around 700 billion dollars.

In particular, Alphabet's relatively sound financial position worked as a strength in the funding process compared with its competitors. When it issued the dollar bonds, the additional spread over U.S. Treasuries for long-term bonds was only 0.95 percentage points. This is lower than Oracle, whose spread is 2.25 percentage points, and even lower than Meta, at 1 percentage point.

Google office in Germany. Reuters, Yonhap News

Anat Ashkenazi, Alphabet's Chief Financial Officer (CFO), said in a conference call immediately after the earnings release on the 4th, "We aim to maintain a very healthy financial position by investing appropriately in a financially responsible way."

Meanwhile, Alphabet (Class A) closed down 1.77% at 318.58 dollars on the New York Stock Exchange on the same day.