Big Tech Turns to Bonds to Feed AI and Cloud Ambitions
America's largest tech names are back in the bond market, raising close to $100 billion to expand data centers and AI infrastructure. That's a notable pivot for companies that usually lean on cash. The spend is big: around $400 billion earmarked for data centers this year, nearly double last year.
There's enthusiasm and risk in the same breath. Deutsche Bank projects AI-related investment could reach $4 trillion by 2030. Even Alphabet's Sundar Pichai has flagged that if the AI boom unwinds, nobody is insulated.
Why they're issuing now
Three reasons stand out. First, preserve balance sheet flexibility while capital needs surge. Second, lock in diverse funding across USD and EUR curves. Third, investor demand is deep - order books are filling quickly, keeping new issue concessions in check.
Issuer snapshots and quick math
Amazon
- New deal: $15 billion (six tranches), first USD sale in three years; demand reportedly ~$80 billion.
- Debt outstanding: $69.29B
- Cash and cash equivalents: $66.92B
- Net debt (approx.): $2.37B
- Next bond payment: $1.25B due Dec 1, 2025
Takeaway: Minimal net leverage and strong demand. Expect focus on tenor mix and spread compression potential if supply tapers into year-end.
Oracle
- New deal: About $18 billion (six tranches) to fund AI infrastructure.
- Debt outstanding: $101.25B
- Cash and cash equivalents: $10.45B
- Net debt (approx.): $90.80B
- Next bond payment: $2.75B due Mar 25, 2026
Takeaway: Higher leverage profile with heavy AI and cloud commitments. Investors will watch free cash flow conversion and margins against rising capex.
Verizon
- New deal: About $11 billion to support a $20 billion acquisition of Frontier Communications.
- Debt outstanding: $139.62B
- Cash and cash equivalents: $7.71B
- Net debt (approx.): $131.91B
- Next bond payment: $205.66M due Mar 20, 2026
Takeaway: Scale and stable cash flows, but a large debt stack. Expect buyers seeking carry, with an eye on integration risk and spectrum/capex envelopes.
Alphabet
- New deal: $17.5B in the U.S. plus €6.5B (~$7.49B) in Europe for general corporate purposes (including refinancing).
- Debt outstanding: $48.78B
- Cash balance: $23.09B
- Net debt (approx.): $25.69B
- Next bond payment: $2B due Aug 15, 2026
Takeaway: Balanced funding across USD and EUR. Cross-currency issuance helps optimize all-in cost while maintaining ample liquidity for AI buildout.
Meta Platforms
- New deal: Filed for up to $30B - its largest ever - to support AI infrastructure spending.
- Debt outstanding: $59.00B
- Cash balance: $10.19B
- Net debt (approx.): $48.81B
- Next bond payment: $2.66B due Aug 15, 2027
Meta has also secured a $27B private capital deal for its "Hyperion" data center and is hiring aggressively in AI. Management expects capex to be "notably larger" next year, which keeps the bond market in play as a supplemental funding source.
What matters for credit and trading
- Capex vs. monetization: Data center spend is surging. Track how quickly AI features translate into revenue and cash flow. Slower payback will pressure spreads on higher-leverage names.
- Funding mix: Watch whether issuers lean more on EUR tranches to shave all-in costs, then swap back to USD as needed.
- Supply technicals: Order books have been strong, but follow-on supply could reprice curves. Meta's size alone can move levels.
- Near-term obligations: Note the upcoming bond payment dates above and monitor for any clustering of 2026-2027 maturities that might pull forward refinancing.
- Downside scenario: If AI demand stalls, operating leverage turns against high spenders fast. As one CEO noted, a bust would touch everyone.
How finance teams can position
- Portfolio: Favor stronger balance sheets (e.g., Amazon, Alphabet) on the long end; use higher carry (Oracle, Verizon) selectively with tighter risk limits.
- Treasury/issuers: If you're funding AI programs, secure duration while demand is hot; keep covenants and maturities staggered to avoid a 2026-2027 wall.
- Risk: Pair long cash bonds with CDS where spreads are tight but supply risk is elevated.
Source data: LSEG and SEC filings. For primary documents, see SEC EDGAR. Market data context: LSEG.
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