Amazon Returns to Bond Market to Raise at Least $25 Billion, Adding Ammo to AI Infrastructure Arms Race

TradingKey - On July 7, Eastern Time, Amazon ( AMZN) returned to the U.S. investment-grade bond market, launching an eight-part benchmark bond offering with plans to raise at least $25 billion for artificial intelligence infrastructure construction and general corporate purposes. Amazon shares edged higher pre-market, up about 0.66% as of press time.

[Source: Futu]

According to people familiar with the matter, the bond offering is divided into eight tranches with maturities ranging from 3 to 40 years to cover different duration demands. The longest-term tranche will mature in 2066, with initial price guidance of about 145 basis points over U.S. Treasuries. Barclays, Goldman Sachs ( GS ), JPMorgan Chase ( JPM ), and Morgan Stanley ( MS) are acting as joint bookrunners.

The proceeds will be used for general corporate purposes, which may include debt repayment, acquisitions, and capital expenditures. While the company did not explicitly specify the use of funds, given current industry trends, the proceeds are highly likely to go toward AI chip procurement and data center expansion for AWS cloud services.

This comes amid a wave of large-scale bond issuances by tech giants. Since the beginning of this year, Google's parent company Alphabet ( GOOGL) has raised about $32 billion in the USD and EUR markets, while Oracle ( ORCL) has also issued $25 billion in bonds. Major cloud service providers are expanding their AI computing power, driving capital expenditures continuously higher.

Morgan Stanley forecasts that global AI-related bond issuance will approach $570 billion this year. Tech giants are shifting from relying on their own cash flow to large-scale debt financing to support capital expenditure plans exceeding $1 trillion.

Amazon stated in February that it plans to invest approximately $200 billion in data centers, chips, and other AI-related equipment in 2026, a figure that far exceeds analysts' previous expectations. In March of this year, Amazon raised a total of approximately $31.5 billion through the Canadian bond market and bank loans. The frequent financing activities indicate that even for a cash-rich company like Amazon, the massive investment in AI infrastructure is testing its financial flexibility.

Investors remain enthusiastic about bond issuances by tech giants. In previous rounds of issuance, subscription volumes have repeatedly reached several times the offering size. At the same time, however, some equity investors have begun to worry whether the hundreds of billions of dollars in AI investments will yield returns as scheduled. The combined capital expenditures of Google, Microsoft ( MSFT ), Amazon, and Meta ( META) in 2026 are projected to reach as high as approximately $725 billion. As the cash-burning race enters a white-hot phase, the market's patience regarding the payback period is being tested.