Amazon lines up another $17.5 billion for AI as its debt pile grows further

MW Amazon lines up another $17.5 billion for AI as its debt pile grows further

By Christine Ji

The tech giant has now raised over $80 billion in external financing this year alone, with no signs of slowing down

Amazon plans to spend $200 billion on AI in 2026, which analysts expect will plunge its free cash flow into negative territory.

Amazon.com is the latest Big Tech company to raise external financing for its artificial-intelligence ambitions, announcing Wednesday a $17.5 billion delayed-draw term loan facility.

Unlike a traditional corporate bond, the issuance has a short commitment window: Amazon (AMZN) has until Sept. 30 to draw up to the full amount, after which the facility expires and the lending banks are released from their obligations. The facility carries a three-year maturity from the date of any borrowing. Interest will accrue at SOFR plus a margin of 0.625% to 0.875%, depending on Amazon's credit rating.

In its 8-K filing disclosing the issuance, Amazon said the proceeds would be used for "general corporate purposes." The company plans to spend $200 billion on AI capital expenditures in 2026 - a figure that analysts polled by FactSet believe will lead Amazon to end the year with nearly $12 billion in negative free cash flow.

Tech hyperscalers are increasingly turning toward debt and equity financing to support the capital needs of the AI buildout. Amazon's borrowing comes after Alphabet's $(GOOGL)$ $(GOOG)$ $85 billion equity raise last week. Meta Platforms (META) is also reported to be considering a similar strategy.

Read: First Google, now Meta? Big Tech may increasingly sell stock to bankroll $820 billion AI boom.

Wednesday's $17.5 billion delay-draw term loan is not Amazon's first shot at raising debt for its AI plans. Earlier this week, Amazon issued 14 billion Canadian dollars (USDCAD) - roughly $10 billion in U.S. dollars - of notes in the Canadian bond market with maturities from 2029 to 2056, according to the filing. It's the largest Canadian bond issuance on record, smashing the previous C$8.5 billion record set by Alphabet just last month.

In March, Amazon raised $54 billion across U.S. and European debt markets in one of the biggest corporate bond offerings in history. The company had initially targeted up to $42 billion, but upped the issuance after outsize demand.

Amazon's capex will go primarily toward Amazon Web Services' data centers, servers, networking equipment and power needs, CEO Andy Jassy wrote in the company's April letter to shareholders. Jassy emphasized that the company's custom-chip business is growing rapidly and seeing booming demand while also bringing cost efficiencies.

Amazon also plans to spend on its robotics and fulfillment technology as well as its satellite communications business, known as Project Kuiper.

More: Amazon's CEO doubles down on AI spending: 'We are not going to be conservative'

-Christine Ji

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June 10, 2026 12:52 ET (16:52 GMT)

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