Alphabet Kicks Off Asia Bond Sale as AI Firms Face Scrutiny

Alphabet began marketing its first Hong Kong and Singapore dollar bond sale Thursday, testing investor appetite for AI-linked debt during a period of market volatility, according to Bloomberg.

The Google parent set initial price guidance for 2-year, 5-year and 10-year Hong Kong dollar bonds at around 4.6%, 5% and 5.5%, according to a person familiar with the matter. It is also marketing 2-year, 5-year, 10-year and 30-year Singapore dollar notes, with guidance around 2.75%, 3.25%, 3.65% and 4%. The bonds could be priced as early as Thursday, the person said. Proceeds will be used for general corporate purposes, which may include repaying outstanding debt.

The deal comes as investors grow more cautious toward AI-linked assets after a broad market selloff last week fueled by concerns that a Democratic sweep in the US midterm elections could lead to greater scrutiny of data center development and AI infrastructure spending. The sector has also been shaken by turmoil at Nvidia, which has been working with an outside firm to identify potential replacements for CEO Jensen Huang.

Alphabet's fundraising is part of a broader push by global hyperscalers to tap new debt markets to finance AI projects. The company sold its first Australian dollar bonds in August and has issued notes in Swiss francs, British pounds, Canadian dollars and Japanese yen this year. Earlier this month, Alphabet raised 6 billion euros (about $6.7 billion) through a multi-tranche euro bond sale, its second offering in that currency this year, paying materially higher borrowing costs than in its inaugural euro deal in May.

Alphabet, Microsoft, Amazon and Meta have been borrowing at a record pace while committing tens of billions of dollars to build out AI capabilities.

Alphabet shares were up 2.11% in delayed trading at $293.45.