So, Amazon wants a lot of money. Like, a lot a lot. The e-commerce and cloud giant Amazon.com Inc. (AMZN) has kicked off what could become one of the largest corporate bond sales in corporate history, aiming to raise somewhere between $37 billion and $42 billion. And what's the money for? To feed the insatiable appetite of its artificial intelligence ambitions, of course.
According to a Bloomberg report citing people familiar with the matter, Amazon is marketing U.S. high-grade bonds in as many as 11 different slices, or tranches, with maturities stretching from a short two years all the way out to a distant 50 years. The goal from this dollar-denominated portion is to raise $25 billion to $30 billion.
But wait, there's more. Amazon is also planning its debut in the euro bond market with an equally ambitious play: a potential eight-part euro bond sale aiming to raise up to 10 billion euros, with maturities from two to 38 years. An eight-tranche offering is something the euro bond market hasn't seen before. The banks managing this financial feat? HSBC Holdings Plc, Citigroup Inc., Goldman Sachs Group Inc., and JPMorgan Chase & Co..
This giant fundraising effort comes at a time when global credit markets are finally taking a breath. Bond issuance had been on hold, but it's resuming after measures of credit risk declined. Why the sudden calm? Comments from U.S. President Donald Trump suggesting the war with Iran may be winding down. In a phone interview, Trump said the U.S. campaign may be nearing its conclusion and that Tehran's military capabilities have been "significantly weakened."
That's a welcome bit of stability for a company that just last week disclosed that drone strikes had hit some of its data centers in the United Arab Emirates and Bahrain. It's a stark reminder that building the global infrastructure for the AI future isn't just about money and chips; it's also about navigating real-world geopolitical risks.
Amazon's move is the latest salvo in what's become a spending arms race in Big Tech. Companies like Alphabet Inc. (GOOGL) and Oracle Corp (ORCL) have also been to the debt markets recently, raising billions to build out the data centers and buy the specialized semiconductors needed for AI. Amazon itself was just here in November, raising $15 billion in an oversubscribed bond sale.
You might be wondering: why does Amazon need to borrow tens of billions when it's sitting on about $84 billion in cash and marketable securities? The answer is scale. JPMorgan analysts have warned that despite that mountain of cash and $58 billion in existing debt, Amazon may still need more liquidity. The bank estimates the company's spending on AI and data centers could balloon to around $150 billion by its 2026 fiscal year. That's a number that starts to make even $84 billion in cash look a bit... insufficient.
The market, however, doesn't seem worried. In fact, it's thrilled. Bloomberg's sources said investor demand for Amazon's new bonds reached about $80 billion at its peak. That's nearly double the high end of what the company is seeking. When you can borrow more money than you even want, and from eager lenders, it's a pretty good sign for your credit.
This is all part of a staggering capital expenditure wave. Amazon, along with peers like Alphabet and Meta Platforms Inc. (META), has projected combined capital expenditures of roughly $650 billion in 2026. That's not a typo. It's a half-trillion-dollar bet on the future of computing, and everyone is scrambling to make sure they have enough chips, servers, and power to win.
As for Amazon's stock, it was up 0.83% at $215.27 at the time of the original report. Because sometimes, when a company announces it's going to borrow tens of billions of dollars, the market just nods and says, "Sounds about right for the AI era."
