Amazon wants to raise $12 billion from the sale of US bonds, Bloomberg News reports

Amazon is looking to raise about $12 billion from the corporate bond market in its first U.S. dollar deal in about three years, Bloomberg News reported Monday, as major tech companies increase investments to stay at the top of the AI ​​race.The e-commerce giant filed for a six-part bond sale earlier in the day without disclosing a size, a regulatory filing showed.

As artificial intelligence workloads grow, major tech companies are turning to large-scale debt sales to finance infrastructure expansion plans costing tens of billions of dollars.
Initial pricing discussions for the longest part of the deal, a 40-year bond, are at a premium of about 1.15 percentage points over Treasuries, according to the Bloomberg report, citing people familiar with the matter.

Amazon did not immediately respond to a Reuters request for comment.

Last month, Meta Platforms announced its largest bond sale of up to $30 billion, while cloud infrastructure and software maker Oracle is also reportedly looking to raise $15 billion in bond sales. US wireless carrier Verizon is also reportedly looking to raise around $10 billion through a bond sale to finance its $20 billion deal for Frontier. Major tech companies, including Meta, Amazon and Alphabet, are expected to spend $400 billion on AI infrastructure this year, according to Morgan Stanley estimates.Amazon has spent more on AI; capital expenditures are expected to be around $125 billion this year, and even more the following year.

According to the Bloomberg report, proceeds from Amazon’s offering could be used for everything from acquisitions and capital expenditures to share buybacks.

Amazon recently announced a $38 billion deal with OpenAI, giving its cloud division a big boost after losing ground to Microsoft and Google. (Reporting by Harshita Mary Varghese in Bengaluru; Editing by Maju Samuel)