Amazon seeks US$12 billion from first US bond sale in three years

[NEW YORK] Amazon.com is seeking to raise about US$12 billion through a debt offering – its first such deal in US dollars in about three years – amid an industry-wide race to build artificial intelligence infrastructure.

Amazon is selling investment-grade bonds in as many as six parts, according to people with knowledge of the matter, asking not to be named discussing private details. Initial price discussions for the longest portion of the deal, a 40-year bond, are for a premium of about 1.15 percentage points above Treasuries, the people added.

Goldman Sachs Group, JPMorgan and Morgan Stanley are managing the bond sale. Proceeds from the offering may be used for everything from acquisitions and capital expenditures to share buybacks, the people said. 

Monday’s sale comes after Google parent Alphabet earlier this month sold US$25 billion of bonds in the US and Europe. Meta Platforms sold US$30 billion of corporate bonds last month, the biggest such offering of the year. Meanwhile, Oracle sold US$18 billion high-grade bonds in September.

The issuance spree from the tech companies has helped push global issuance to a record of more than US$6 trillion this year. JPMorgan Chase expects the fresh wave of spending to finance investments in artificial intelligence to drive issuance in the US high-grade-grade market to a record US$1.81 trillion next year. 

Amazon is the world’s largest seller of rented computing, which is critical to powering artificial-intelligence systems. Like its biggest rivals, the company has been investing heavily in data centres and chips to build and run AI models capable of generating text or images and automating processes. Amazon’s capital expenditures rose 61% to US$34.2 billion in the third quarter.

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The power capacity of Amazon’s data centre fleet has doubled since 2022, and chief executive officer Andy Jassy has said he expects it to double again by 2027. Earlier this month, the company’s cloud unit signed a US$38 billion deal to supply OpenAI access to hundreds of thousands of Nvidia graphics processing units as part of a seven-year computing deal. BLOOMBERG