Shares of Alphabet Inc. (GOOG) edged lower in early trading, falling approximately 0.5% to $321.52, following news that the tech giant is preparing a significant debt offering. The company is reportedly lining up an investment-grade bond sale of around $15 billion to support its aggressive capital expenditure plans, particularly in artificial intelligence infrastructure.
Financing the AI Arms Race
The bond issue, which could be structured across as many as seven tranches with maturities extending to 2066, comes as Alphabet projects its 2026 capital spending could surge to between $175 billion and $185 billion. This marks a substantial increase from the $91.45 billion spent in 2025. CEO Sundar Pichai has emphasized that these AI investments are driving revenue and broad-based growth, with Google Cloud revenue jumping 48% to $17.7 billion in the December quarter.
This move reflects a broader trend where even cash-rich technology firms are turning to debt markets. Analysts estimate Big Tech could deploy up to $660 billion in 2026 toward AI chips and data centers, leading investors to scrutinize free cash flow and the sustainability of shareholder return programs.
Green Energy and Legal Headlines
Concurrently, Alphabet secured a major clean energy agreement. TotalEnergies signed long-term deals to supply 1 gigawatt of solar power—amounting to 28 terawatt-hours over 15 years—to Google's Texas data centers. Construction is slated to begin in the second quarter.
Separately, a California state court trial commenced, examining claims that Instagram and YouTube's design contributed to mental health harm. The outcome could influence future platform liability standards beyond user-generated content.
Market Context and Key Risks
The broader market opened softly, with the Dow, S&P 500, and Nasdaq Composite all posting modest declines. Investor focus now shifts to upcoming U.S. economic releases, including the January Consumer Price Index and Employment Situation reports due Friday. These figures are pivotal for Federal Reserve rate expectations and could impact financing costs for growth-oriented companies like Alphabet.
Analysts note near-term risks include higher interest rates and wider credit spreads, which would increase borrowing costs. The bond sale's pricing and investor demand will be closely watched, as will the pace of AI product adoption needed to justify the sector's monumental spending.
