Amazon aims to raise USD 25 billion from bond sale

Amazon.com said on Tuesday it is looking to raise USD 25 billion through a US dollar bond sale, in the company's latest push to fund its hefty AI investments.

Tech companies have been tapping debt markets and launching equity sales to fund their costly AI infrastructure build-out. Big Tech, including Amazon, Alphabet, Microsoft, and Meta, are expected to spend more than USD 700 billion on AI this year.

Peak demand for the offering reached USD 62 billion, according to a report by Bloomberg News, which also first reported about the latest offering.

The offering includes a mix of fixed-rate and floating-rate notes, across eight tranches, with maturities ranging from 2029 to 2066, according to a final term sheet filed on Tuesday.

An Amazon spokesperson said proceeds from the bond sale will be used for corporate purposes, including future capital expenditures and repaying upcoming debt maturities.

Turning to debt and equity offerings for capital marks a shift for the Silicon Valley giants, who have typically relied on their cash reserves to fund their investments. The recent debt offerings have seen strong investor appetite.

Google-parent Alphabet last month said it would raise some USD 85 billion in an upsized equity sale. Facebook-parent Meta earlier this year sold investment-grade bonds worth USD 25 billion, following a USD 30 billion bond sale in October, which was the company's biggest ever.

Amazon said in its exchange filing that Barclays, Goldman Sachs, J.P. Morgan and Morgan Stanley are the joint book-running managers for the offering.

The company had in March targeted a USD 37 billion raise in a heavily oversubscribed 11-part bond sale.

(Reporting by Deborah Sophia in Bengaluru and Nupur Anand in New York, additional reporting by Jaspreet Singh in Bengaluru; Editing by Shilpi Majumdar, Arun Koyyur, and Maju Samuel)