Google’s parent company, Alphabet, is seeking to raise $20 billion through a bond sale to fund its AI infrastructure buildout, citing potential risks and costs associated with AI investments. This move comes as the company reported a high-end capital expenditure projection of $185 billion for the year, more than double its 2025 capex.

Alphabet’s debt funding plans follow a $25 billion bond sale in November, which saw its long-term debt quadruple to $46.5 billion in 2025. CFO Anat Ashkenazi emphasized the importance of a fiscally responsible approach to investing as the company navigates increased demand for AI capabilities and compute capacity.

CEO Sundar Pichai highlighted the challenges of meeting compute capacity demands and supply chain constraints on a recent earnings call, emphasizing the importance of scaling up to address the growing need for AI services. Google, along with tech giants like Microsoft, Meta, and Amazon, is projected to significantly increase capex this year to support AI initiatives.

Google’s AI strategy centers around Gemini, its large language model and AI assistant, which has garnered over 750 million monthly active users. With the rise of generative AI, Google faces the risk of potential changes in consumer behavior impacting its dominant ad business, prompting the company to adapt advertising formats to meet evolving demands.

Despite concerns about AI’s impact on search and ad revenue, Google reported a 13.5% increase in ad revenue in the fourth quarter, demonstrating resilience in the face of changing market dynamics. The company remains focused on effectively navigating the evolving landscape of AI technology and advertising formats.

Read more at CNBC: Alphabet highlights new AI-related risks in tapping debt market