Alphabet plans first yen bond sale to fund AI spending, term sheet shows

May 12 (Reuters) - Google parent Alphabet is planning its first yen-denominated bond sale, according to a term sheet seen by Reuters on Tuesday, as technology giants increasingly tap debt markets to fund AI infrastructure spending.

The term sheet did not disclose the size of Alphabet's bond sale, which will be a multi-tranche one, but a source with direct knowledge of the deal had told Reuters on Monday that the issuance was expected to total several hundred billion yen.

Alphabet's yen-denominated bond sale will be in maturities of three, five, seven and 10 years, along with longer-dated notes of 15, 20, 30 and 40 years, although one or more tranches could be dropped subject to demand and market conditions, the term sheet showed.

The yen-denominated bond issuance is part of an effort by Alphabet to diversify its funding currencies and investor base, the source said.

Alphabet did not respond to a request for comment.

It has already issued notes in euros, sterling, Canadian dollars and Swiss francs.

Investor demand for yen-denominated bonds has remained intact despite the Iran war with an expanding issuance pipeline heading into mid-year.

Overseas investors are also increasingly participating in the market as interest rates in Japan rise.

E-commerce giant Amazon is also preparing to issue a six-part bond offering in Swiss franc denomination for the first time, another source has told Reuters.

The overseas bond sales underscore how surging spending on artificial intelligence is leading American technology companies to court investors beyond the U.S. in the high-stakes race.

Alphabet's capital spending doubled in the first quarter compared to a year earlier and the company said it expected to spend as much as $190 billion this year.

More broadly, Big Tech is expected to spend more than $700 billion on AI infrastructure this year, a sharp increase from $410 billion in 2025. That has led the companies to rely more on debt, after putting to use their large cash flows for years.

Alphabet has mandated Mizuho, Bank of America (BAC) and Morgan Stanley (MS) to work on the transaction. (Reporting by Sameer Manekar in Bengaluru and Miho Uranaka in Tokyo; Editing by Subhranshu Sahu and Muralikumar Anantharaman)