Alphabet Eyes $5.7B Junk Bond at 6.25%–6.375% to Fund AI Data Centers
Alphabet’s cloud infrastructure arm is seeking $5.7 billion through a junk-bond deal offering yields of 6.25%–6.375% to finance AI data center expansion, marking the largest such transaction tied to the AI buildout frenzy. The bonds, led by Morgan Stanley, may price this week after CoreWeave’s $1 billion and $1.75 billion offerings demonstrated strong investor demand.
1. Bond Offering Details
Alphabet’s data center division plans to issue $5.7 billion of high-yield notes due 2031, priced at yields between 6.25% and 6.375%. The transaction, led by Morgan Stanley, is structured as a junk-bond sale and is expected to price within days at a slight premium over par, following strong institutional demand.
2. AI Expansion Financing Context
The debt sale follows recent offerings by AI infrastructure firms and reflects escalating capital requirements for scaling Google’s AI cloud capacity. Proceeds will support new data center construction and GPU procurement, underpinning Alphabet’s push to maintain leadership in enterprise AI services.