Why are companies like Amazon and Meta issuing so much debt?

These companies are issuing significant debt, with a substantial portion earmarked for funding AI development and new data centers.

How has the debt issuance affected tech company bonds?

The increased supply of bonds has widened the yield spread for tech companies, meaning their debt yields are higher compared to the overall market.

What is the outlook for tech company debt issuance?

Analysts anticipate a further $100 billion in debt offerings from these hyperscalers in the upcoming year.

Home / Business and Economy / Tech Giants Tap Debt for AI Boom

Tech Giants Tap Debt for AI Boom

19 Nov, 2025

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Summary

Hyperscalers issued $121 billion in debt this year.
Meta's Louisiana data center funding via debt is significant.
Tech debt has increased yields relative to the market.

Five major technology firms, including Amazon, Google, Meta, and Microsoft, are significantly increasing their reliance on debt financing to fund operations. This year, these hyperscalers collectively issued $121 billion in debt, a substantial increase compared to the $28 billion annual average over the past five years. A notable portion of this debt, $27 billion, was allocated to Meta's new data center in Louisiana, with Amazon also issuing $15 billion in new debt.

This influx of investment-grade corporate bonds has led to a wider "spread," meaning the interest yield on these companies' debt is higher relative to the broader market. For example, Oracle's debt yields are trading 48 basis points higher, and Meta's and Google's are also showing increased spreads. Analysts predict a further $100 billion in debt offerings from these companies in the coming year.

While these companies generate ample cash flow, the increasing use of debt for AI development is complicating the investment landscape for tech stocks. This shift introduces a layer of complexity to what was previously considered a straightforward investment narrative for these tech giants.