Google’s parent company Alphabet is preparing to raise as much as A$5 billion through its first Australian-dollar bond, potentially making it the largest corporate debt deal in Australia’s market and highlighting the enormous cost of the global AI race.

The proposed ‘Kangaroo bond’ transaction would see the US technology giant borrow directly from Australian investors. Alphabet has appointed ANZ, Deutsche Bank, RBC Capital Markets and TD Securities to arrange the deal.

Alphabet’s move into the Australian debt market comes as technology companies are increasingly pouring unprecedented amounts of money into AI infrastructure.

The Google parent recently raised US$25 billion through a US-dollar bond sale, following an equity capital raising of about US$85 billion earlier this year. Alphabet has also been accessing bond markets in other currencies as it seeks to finance its AI expansion. The company has been investing in data centres, computing infrastructure and the energy required to operate increasingly powerful AI systems.

Across the global technology sector, AI-related spending is expected to exceed US$730 billion (A$1.026 trillion) in 2026, putting pressure on the cash flows of even the world’s wealthiest technology companies. Alphabet reported negative free cash flow in the second quarter, reflecting the scale of its investment program.

Australia as a New Source of Capital

Kangaroo bond issuance has reached a record of around A$60 billion so far in 2026, about 40% higher than the previous year, according to data reported by Reuters.

For Alphabet, issuing debt in Australian dollars would broaden its investor base and diversify its funding sources beyond the US dollar.

The deal would also be significant for Australia’s technology and debt markets. If it reaches A$5 billion, it would exceed previous major corporate bond transactions in Australia.

AI Spending Risks

The deal comes with questions about how quickly AI spending is translating into cash generation. Technology companies are committing enormous sums to AI infrastructure before the long-term returns from those investments are fully established, making the strategy an important issue for investors.

Alphabet’s proposed Australian bond represents more than just a major debt transaction; it’s a sign of how the global AI race is reshaping financial markets.Â