Key Points
- Amazon is raising $15 billion in its first U.S. dollar bond sale in three years.
- The move is part of a broader trend of big tech companies raising debt to fund AI infrastructure.
- The bond sale was highly successful, attracting about $80 billion in demand.
- Amazon is expected to spend around $125 billion on capital expenditures this year, largely driven by AI.
Amazon announced on Monday that it will raise $15 billion through its first U.S. dollar bond offering in three years. This move comes as major tech companies are ramping up their investments in the infrastructure needed for artificial intelligence.
Big tech firms are increasingly turning to bond sales to raise tens of billions of dollars to expand their infrastructure as demand for AI workloads skyrockets.
Earlier on Monday, the e-commerce giant filed for a six-part bond sale. The company said the money raised could be used for a variety of purposes, including acquisitions, capital expenditures, and the repurchase of its own shares.
The bond sale was a huge success, attracting about $80 billion in demand at its peak, according to a Bloomberg News report. This high demand allowed Amazon to get better terms, with the interest rate for the longest portion of the deal, a 40-year bond, tightening significantly.
This move by Amazon is part of a larger trend in the tech industry. Last month, Meta Platforms announced its largest-ever bond sale, aiming to raise $30 billion. The cloud infrastructure and software company Oracle is also reportedly looking to raise $15 billion in bond sales.
Major tech firms, including Meta, Amazon, and Alphabet, are expected to spend a combined $400 billion on AI infrastructure this year, according to Morgan Stanley estimates.
Amazon, in particular, has been increasing its AI spending, with capital expenditures expected to reach around $125 billion this year and even more next year. The company recently signed a $38 billion deal with OpenAI, a major win for its cloud unit, which had been losing ground to Microsoft and Google.
