In a move that surprised many financial experts, Google’s parent company, Alphabet, issued a bond this week that will not mature until 2126—nearly a century from now. The bond is part of a multi-billion-dollar debt issuance aimed at financing the company’s ambitious artificial intelligence plans.
Typically, companies seeking to raise capital have two options: issuing shares or issuing bonds. Google chose the latter, but the decision to issue 100-year debt made the move truly sensational. In a world where even companies with a market capitalization of around four trillion dollars and more than 73 billion dollars in annual free cash flow like Google turn to borrowing, this represents a financial strategy with an unusually extreme historical horizon.
The reason lies in Google’s plans to double its spending on artificial intelligence this year, investing an astonishing 185 billion dollars—an amount that even its 126 billion dollars in cash reserves may not fully cover.
Century bonds are rare for one key reason: companies simply do not last that long. History shows that such long-term debt can be risky. IBM, for example, issued its 100-year bond in 1996 but soon lost part of its dominance with the rise of Microsoft and Apple. Similarly, J.C. Penney sold century bonds in 1997 that were worth only a fraction of their original value 23 years later. Even Motorola, the last U.S. company to issue such debt, despite servicing it, eventually lost its market dominance, as noted by investor Michael Burry.
These examples illustrate a classic truth: debt with a century-long maturity is more a symbol of confidence and long-term vision than a safe investment for the average individual. Such bonds make the most sense for institutional investors with long-term liabilities—pension funds, university endowments, and life insurance companies.
Nevertheless, the market welcomed Alphabet’s move with enthusiasm. In less than 24 hours, the company raised nearly 32 billion dollars through the sale of debt denominated in U.S. dollars, British pounds, and Swiss francs. Demand was nearly ten times greater than supply, showing that confidence in Google’s future remains strong—or at least that the market is willing to bet on it.
