Alphabet Flags New AI Risks as It Raises Debt to Fund Massive Infrastructure Push

Alphabet has formally acknowledged a new set of risks tied to artificial intelligence as it accelerates investment in compute-heavy infrastructure and turns to the debt market for funding. The Google parent outlined these concerns in its latest annual filing, even as it prepares to raise up to $20 billion through a multi-tranche bond sale.

The company said the rapid expansion of AI training and inference workloads could affect its core advertising business and increase exposure to long-duration commercial contracts linked to data centers and cloud capacity. Alphabet warned that large leasing commitments with third-party operators may lead to higher costs, operational complexity, and potential excess capacity if demand projections do not materialise as expected.

To support its AI build-out, Alphabet is planning a major bond issuance, including an unusually long 100-year bond, according to people familiar with the matter. The deal is reportedly oversubscribed, signalling strong investor appetite despite the scale of the company’s capital expenditure plans. Alphabet has indicated that capital spending could reach as high as $185 billion this year, more than double its 2025 outlay.

Executives have described compute capacity as a central challenge, citing constraints around power, land, and supply chains as the company races to meet surging demand for generative AI services. At the core of Alphabet’s AI strategy is Gemini, its flagship large language model and assistant, which the company says now has more than 750 million monthly active users.

While Alphabet noted that advertising revenue continues to grow, it also acknowledged for the first time that wider adoption of generative AI could alter user behaviour around internet search, potentially reshaping digital advertising formats and monetisation strategies. The company said there is no guarantee it will adapt quickly enough to maintain its competitive position as AI-driven alternatives evolve.

Despite these uncertainties, Alphabet said it remains committed to funding AI expansion in a financially disciplined manner, balancing aggressive investment with the need to maintain a strong balance sheet as competition intensifies across the global technology sector.