Amazon set to raise $12 billion in first US bond sale to fuel AI growth

Amazon is returning to the US bond market after three years to raise $12 billion, aiming to fund its growing investments in AI and expand its infrastructure

Amazon is preparing to raise about $12 billion through a corporate bond sale, its first US dollar offering in nearly three years, as major technology companies boost spending to support fast-growing artificial intelligence (AI) needs, Bloomberg reported.

 

The company filed for a six-part bond issue earlier in the day, according to a regulatory filing that did not specify the total size.

 

As AI usage accelerates, tech giants are increasingly turning to large bond sales to finance infrastructure projects that require tens of billions of dollars.

 

For the longest portion of Amazon’s offering, a 40-year bond, initial price talks suggest a premium of roughly 1.15 percentage points above US Treasuries, Bloomberg reported.

 

 

Which tech giants are raising record bond amounts?

 

Other major firms are also tapping the market. Last month, Meta Platforms announced bond sales of up to $30 billion, while Oracle is reportedly planning to raise $15 billion. US telecom company Verizon is said to be seeking $10 billion through bonds to help finance its $20 billion acquisition of Frontier.

 

Morgan Stanley estimates that companies like Meta, Amazon and Alphabet will spend about $400 billion this year on AI-related infrastructure. Amazon alone is expected to record capital expenditure of around $125 billion in 2024, with even higher spending likely next year, Reuters reported.

 

Amazon could use the bond proceeds for acquisitions, capital spending and share buybacks. The company also recently announced a $38 billion deal with OpenAI, aimed at strengthening its cloud business after losing ground to Microsoft and Google.   

 

How much is Meta planning to raise?

 

Last month, Meta Platforms said it would raise at least $25 billion through investment-grade bonds. Bloomberg reported that the sale is likely to be among the biggest US corporate deals of 2025.

 

This planned offering follows a $27 billion private bond deal earlier in the month that supported construction of a Meta data centre in Louisiana. The project is mostly owned by Blue Owl Capital Inc, with much of the debt initially purchased by PIMCO.

 

Meta’s latest fundraising comes amid a broader financing surge among hyperscalers. Morgan Stanley estimates these companies, including Meta, Microsoft and Alphabet, will spend about $3 trillion on data centres through 2028. Roughly half is expected to come from internal cash flows, with the rest from credit markets.

 

Meta is planning to issue bonds in up to six tranches, with maturities ranging from five to 40 years. The 40-year tranche is likely to offer a yield of about 1.4 percentage points above benchmark Treasuries, Bloomberg reported.

 

How AI is driving business performance

 

Chief Executive Officer Mark Zuckerberg and Chief Financial Officer Susan Li told analysts that Meta’s heavy AI investments are improving ad targeting and content recommendations, which remain central to the company’s business model.

 

Meta posted a 26 per cent rise in third-quarter revenue to $51.2 billion, driven largely by advertising, which contributes around 98 per cent of its income.

 

(With agency inputs)