Big Tech firms, previously touted for being capital-light, are now spending vast sums of money
towards AI infrastructure. In 2025, four hyperscalers—Alphabet, Amazon, Meta and Microsoft—
spent over $400 billion. The estimated 2026 capex for these four companies is $650 billion.
"Century bonds get issued when money is easy.
The first wave came in the mid to late 1990s, when companies had
a lower yield compared with safe Treasurys than any time since.
The cost of corporate debt compared with Treasurys jumped
after hedge fund Long-Term Capital Management imploded."
"The second wave came when money was actually free during the period of zero interest rates.
It didn’t end well, with Argentina defaulting after just three years and Austria’s bonds now worth
just 5% of what they were worth at issue, as zero rates proved temporary."
"The spread of corporate yields over Treasurys last month hit the lowest since just after Coke’s 1998 bond,
amid strong demand for the safety of high-quality issuers.
This is a great time for companies to borrow; it isn’t obviously a great time to lend to them."
https://www.msn.com/en-us/money/markets/alphabet-s-rare-100-year-bond-tells-us-that-money-is-easy/ar-AA1W9fsF
Comments
@WABAC
I have "plate of shrimp moments" all of the time. Seriously. I mentioned to a friend that I had gained a new appreciation of a particular Dylan song, that I had heard recently. I hadn't named it, yet. Without so much as a blink, he named it: Shelter From The Storm? And he said, "Me too!"
I was gobsmacked. Cosmic unconsciousness.
As EU government continue to sell dollar (i.e. treasury), these institutional fund have to invest elsewhere. Here is where high quality bonds from US tech companies present. Google may change to something else 100 years from now or the AI story goes busted, these bonds still get pay their creditors. That is the assumption for institutional investors. Europe will still be around but individual investors will not.
This is a case of extreme confidence on Google. We will see how this will play out. Here is another take.
https://cnn.com/2026/02/10/business/google-one-hundred-year-bond#openweb-convo
Joking, of course.
I may consider a 6 month term with 10% dividend to reflect the risk.
Kodak, failed to change to digital even though they made successful prototpe SLR camera.
Polaroid, a single product company who failed to innovate to the digital world
US Steel, old and inefficient manufacturing process. Japan and Germany leapfrogged steel production with electric arc method after WWII.
Sears, did not keep up time and failed to compete with large retailers such as Walmart
And there are many more. Please feel free to add.
K-Mart ruled their space at one time.
GE arguably collapsed as a conglomerate.
Montgomery Ward no longer exists in brick and mortar.
Interestingly, NCR transitioned into a software company. At one point AT&T bought them. The joke was that the new company name would be Cash Registers and Phones (CRAP). Then, like T did with almost any acquisition, they spun them back off, worse than they found them.
WeCo was an amazing manufacturing powerhouse, with tight quality control. In addition to telephone equipment, it produced a wide variety of consumer goods. It essentially ceased to exist in 1996. Bell Labs was created from Western Electric's engineering operations.
I had family that worked at the Western Electric Hawthorne Works. At its peak, it employed 45,000 workers, and was a city unto itself. https://en.wikipedia.org/wiki/Hawthorne_Works
AT&T Long lines and Bell System local service was the cash cow. Most people's experience with AT&T was through both of them. AT&T did rebrand some Olivetti PCs in the 1980's, but never got into personal computing in any real fashion.
Bell Labs is now Nokia Bell Labs. Since Dotcom, what was originally Bell Labs/WeCo (Lucent) acquired or merged with Northern Telecom, Alcatel & eventually Nokia. They hold a sh*t ton of patents, and at least 11 Nobel prizes. The headquarters are in Finland. Notably, Nokia stock is doing really well in the last year - up 44%.
In the U.S., most are only familiar with Nokia cellphones. Globally, they are well known multinational in telecom, IT and consumer products, with a history even longer than AT&T.
Both AT&T and Nokia could have issued 100 year bonds and been around to honor them.
And that is how you take a long twisted story, and keep it on topic!