Tech companies tap debt markets to fund AI and cloud expansion

The world’s largest technology companies are turning to debt markets to finance AI and cloud expansion, marking a shift from their traditional reliance on cash reserves. Alphabet, Amazon, Microsoft, and Meta have signaled that AI spending will exceed $700 billion in 2024, up from $600 billion previously, according to Bridgewater Associates. Amazon plans to issue a six-part bond offering in Swiss francs and raise about $37 billion in an 11-part bond sale, with total debt outstanding at $122.11 billion and cash reserves of $104.69 billion. Salesforce priced a $25 billion debt offering in March to fund a $50 billion share buyback and raised its dividend by 5.8%, despite holding only $7.33 billion in cash equivalents. Oracle aims to raise $45 billion to $50 billion in 2026 through debt and stock to expand cloud capacity, following a January lawsuit from bondholders alleging undisclosed debt plans. The company had previously filed to raise $18 billion in debt for AI infrastructure, with total debt outstanding at $123.50 billion. Alphabet disclosed plans to sell yen-denominated bonds for the first time, alongside a $31.51 billion debt raise, including a rare 100-year bond worth 1 billion pounds. The company’s total debt stands at $97.39 billion, with $38.06 billion in cash reserves. Verizon separately filed to raise $11 billion to fund its $20 billion acquisition of Frontier Communications. Analysts describe the AI boom as entering a ‘more dangerous phase,’ with exponentially rising investments in physical infrastructure and increased reliance on external capital.