Amazon is poised to raise $15 billion through its first U.S. dollar bond offering in three years, according to Bloomberg News. This figure surpasses initial estimates of $12 billion and reflects the broader trend of significant investments by major technology firms in infrastructure to support artificial intelligence (AI) capabilities.
As AI workloads expand, big tech companies are leaning towards large-scale debt sales to finance expensive infrastructure developments. The bond offering garnered approximately $80 billion in demand, indicating strong investor interest. The funds raised may be allocated toward various purposes, including acquisitions, capital expenditures, and share buybacks.
Amazon recently filed for a six-part bond sale but did not disclose the size in its regulatory filing. The pricing of the longest bond, a 40-year option, has been adjusted, with terms tightening from an initial premium of 1.15 percentage points above Treasury rates to 0.85 percentage points.
Similar to Amazon, other tech giants are also engaging in substantial bond sales to bolster their AI infrastructure. Last month, Meta Platforms revealed plans for a massive bond sale of up to $30 billion, while Oracle is reportedly looking to raise $15 billion. Collectively, major firms in the tech sector, including Alphabet, are expected to invest around $400 billion in AI infrastructure this year, according to estimates from Morgan Stanley.
Amazon has been ramping up its capital expenditures, expected to reach approximately $125 billion this year, with additional growth planned for the following year. The company’s recent $38 billion agreement with OpenAI signifies a strategic move to enhance its cloud service portfolio, particularly after facing increased competition from Microsoft and Google.
These developments underscore a significant shift in the tech industry as companies prioritize the establishment of robust AI frameworks to drive future growth. The ongoing investments signify not only a competition for technological supremacy but also a commitment to fostering innovation and enhancing operational efficiencies in a rapidly evolving landscape.