Alphabet is raising up to $5 billion from the Australian bond market in what could be the country’s biggest corporate debt transaction, with the Silicon Valley giant behind Google and Gemini scrambling for cash to finance an artificial intelligence arms race against other big technology companies.
The so-called Kangaroo bond will mark the first time Alphabet has raised debt in Australia, and is part of a year-long move to bolster its war chest for AI spending. Earlier this month, it raised $US25 billion ($35 billion) from the US, and before that had sold bonds in the Canadian, Japanese and Swiss markets. In March, Alphabet issued a 100-year, £1 billion ($1.9 billion) bond in the UK.
“We’re absolutely interested,” Mark Bayley, a portfolio manager at the $14 billion bond investor Kapstream, said of Alphabet’s Australian bond offer.
“It’s probably the equivalent of the SpaceX IPO for the corporate bond market. Everybody has been talking about AI coming. Is the Australian market big enough? Is it not big enough? I think that’s been answered.”
Although the size of the issuance has not yet been disclosed, people briefed on the discussions who requested anonymity to speak freely said Alphabet hoped to raise between $4 billion and $5 billion. ANZ, Deutsche Bank, RBC Capital Markets, and TD Securities are jointly managing the sale.
If successful, it will be the biggest corporate debt issue in Australia. Apple holds that record; it raised $2.25 billion more than a decade ago.
Bayley said a sale of that size looked “sensible” given the constraints of the Australian market and the funding requirements of the so-called hyperscalers, the name given to big digital infrastructure companies such as Alphabet and Amazon, which are spending a lot of money to expand their cloud computing and data centre capacities.
In July, Alphabet spooked investors when it outlined plans to spend between $US195 billion and $US205 billion next year. The company, through its subsidiary Google, operates the world’s dominant search engine platform, but has been a laggard in the AI race, as rivals such as OpenAI and Anthropic release more powerful models. Alphabet has announced several new models and has been rolling out what it calls AI Mode into its search engine and other products.
Source:https://www.afr.com/markets/debt-markets/google-prepares-5b-kangaroo-bond-as-ai-arms-race-comes-to-australia-20260817-p60p04