Alphabet’s Mega Bond Plans Includes 100-Year Offering | Bloomberg Tech 2/9/2026

Bloomberg Tech - February 12, 2024 - Summary

Key Concepts:

• Big Tech Debt Issuance: Alphabet’s $15 billion bond sale, including a rare 100-year Sterling note, signals a trend of tech companies utilizing debt markets to fund AI capital expenditures.
• AI Investment Surge: Estimates for total hyperscaler spending on AI infrastructure are increasing, now projected to reach $4 trillion by 2030.
• Oracle & OpenAI Relationship: Oracle’s stock performance is heavily tied to the success of OpenAI, particularly OpenAI’s ability to monetize and secure funding.
• Bitcoin Volatility & Institutionalization: Bitcoin’s recent price drop below $70,000 reflects a shift in its perception from a “digital gold” to a risk asset, driven by institutional investment and market maturation.
• Apple’s Product Roadmap: Apple is preparing to release a new iPhone 17E, updated iPads (with M4 and A18 chips), and MacBook Pros.
• Super Bowl Tech Ads: The 2024 Super Bowl featured a significant increase in advertising from tech and pharmaceutical companies, with AI being a prominent theme.
• Workday Leadership Change: Workday co-founder Aneel Bhusri is returning as CEO, replacing Carl Eschenbach, amidst a challenging market environment and recent job cuts.

I. Bond Market Activity & Tech Funding

Alphabet is planning a $15 billion bond sale, including a unique 100-year Sterling-denominated note – a structure not seen since the late 1990s. This move, along with similar actions by other Big Tech companies, is driven by the need to finance substantial capital expenditures related to Artificial Intelligence (AI). Robert Schiffman (Math Camp) argues that these companies aren’t needing the money, but rather capitalizing on exceptionally low borrowing costs and insatiable demand for high-quality bonds. The weighted average cost of debt capital for these companies is effectively zero, making debt a strategically advantageous funding source. He anticipates further bond issuances from Amazon and Microsoft. JP Morgan forecasts $400 billion in investment-grade bond sales this year, with Schiffman believing the actual figure will be closer to $750 billion, potentially reaching $4 trillion in cumulative spending by 2030. Companies are also exploring issuing bonds in various currencies, including Swiss Francs and Euros.

II. Oracle, OpenAI, and the AI Infrastructure Play

Oracle’s stock performance is closely linked to OpenAI’s success. David Davidson’s note suggesting improvements from OpenAI would boost Oracle’s shares triggered a significant rally. Gil Luria (Managing Director) explained that much of Oracle’s backlog is tied to building infrastructure for OpenAI. Concerns about OpenAI’s ability to pay for these services had negatively impacted Oracle’s stock, but recent developments – including a potential $100 billion investment in OpenAI from Amazon, Microsoft, and NVIDIA – have alleviated those concerns. OpenAI is expected to have $140 billion in cash, ensuring its ability to meet its obligations to Oracle. While risky, Oracle is successfully navigating the challenges of this large-scale infrastructure build-out. Luria noted that NVIDIA and Microsoft are the biggest beneficiaries of this trend.

III. Bitcoin’s Recent Volatility & Shifting Narrative

Bitcoin experienced a significant dip below $70,000, following a volatile weekend. Isabelle Lee highlighted a 16% decline last week, with the implied volatility index jumping to 97% – the highest since 2022. This volatility is prompting a reassessment of Bitcoin’s role as a hedge against inflation or centralized governments. Jalak Jobanputra (Future Perfect Ventures) noted that Bitcoin is increasingly behaving like a risk asset, trading more in line with tech stocks than commodities. The maturation of Bitcoin, coupled with increased institutional investment, is contributing to this shift. Forced liquidations totaled $2.5 billion last week, mirroring a similar event in October linked to leveraged derivative trades. Jobanputra believes the philosophical divide is widening, with institutional investors viewing Bitcoin differently than long-term holders who initially embraced its decentralized nature. She also emphasized the growing importance of stablecoins and blockchain technology beyond Bitcoin itself, particularly in areas like tokenized securities and real-world asset integration.

IV. Apple’s Upcoming Product Releases

Mark Gurman reported on Apple’s upcoming product releases, including a new iPhone 17E (with the same chip as the 17 and magnetic wireless charging), updated iPads (iPad Air with M4 chip and a new entry-level iPad with A18 chip supporting iPhone Intelligence), and new MacBook Pros. The iPhone 17E is targeted towards education and enterprise markets, with a lower price point. Gurman emphasized the need for upgrades, particularly for users with older machines.

V. Super Bowl Advertising & Market Trends

The 2024 Super Bowl saw a significant increase in advertising from tech and pharmaceutical companies, with AI being a prominent theme. Kevin (EDO) noted that AI-focused ads generated 9.1 times the reaction of other ads. The Super Bowl is seen as a valuable platform for reaching a large and engaged audience, even for enterprise-focused products. The ads also reflected a shift in marketing towards Gen X and Millennials, who currently hold the most economic power. The success of pharmaceutical ads, particularly from Novo Nordisk, also highlighted a growing trend in that sector.

VI. Workday Leadership Change & Market Reaction

Workday co-founder Aneel Bhusri is returning as CEO, replacing Carl Eschenbach, following a recent announcement of 400 job cuts. The market reacted negatively to the news, with the stock trading at its lowest level since November 2022. Brady Ford explained that application software companies are facing scrutiny from investors, who are questioning their growth rates despite strong usage numbers. The return of the founder is seen as a move to refocus the company on product development and R&D.

Notable Quotes:

• “Why do you have AA and AAA balance sheets if you are not going to use them?” – Robert Schiffman, emphasizing the strategic advantage of utilizing debt for Big Tech.
• “The pendulum swung too far.” – Gil Luria, referring to the market’s initial overreaction to concerns about OpenAI’s financial stability.
• “Bitcoin is becoming a victim of its own success.” – Isabelle Lee, highlighting the shift in Bitcoin’s perception as it becomes more institutionalized.
• “It is a philosophical divide…the digital gold narrative may hold in emerging markets and not developed markets.” – Jalak Jobanputra, on the changing perception of Bitcoin.

Data & Statistics:

• Alphabet bond sale: $15 billion
• Hyperscaler AI spending (current estimate): $750 billion (up from $650 billion, previously $2-4 trillion)
• Oracle backlog: Largely tied to OpenAI infrastructure.
• Bitcoin price drop: Below $70,000, 16% decline last week.
• Implied volatility index: 97% (highest since 2022).
• Workday stock decline: Down 40% over the last year.
• Super Bowl AI ad reaction: 9.1x higher than other ads.

Conclusion:

The Bloomberg Tech broadcast highlighted a dynamic landscape characterized by Big Tech’s strategic use of debt to fund AI infrastructure, a shifting narrative around Bitcoin’s role as an asset, Apple’s upcoming product releases, and a leadership change at Workday. The overarching theme is a transition from initial hype to a more nuanced understanding of the long-term implications of AI and the evolving dynamics of the technology market. Investors are increasingly focused on the practical applications of technology and the ability of companies to deliver sustainable growth.