economy
Amazon takes on $17.5B in new debt as AI spending pushes total borrowing past $225 billion
Amazon agreed to a $17.5B loan led by Citigroup. Total debt is now over $225B, up 50% in a year. The money funds a $200B AI capex plan and equity stakes.
TL;DR
- Amazon secured a $17.5 billion delayed-draw term loan led by Citigroup.
- The company has been on a borrowing spree, including a record C$14 billion in Canadian dollar bonds and sales in euros, US dollars, and Swiss francs.
- Amazon's total debt, including lease payments, now exceeds $225 billion, a 50% increase from the previous year.
- The loan is for general corporate purposes, likely supporting business investments, capital expenditures, and debt repayment, including significant AI investments like those in OpenAI and Anthropic.
- Amazon plans to spend approximately $200 billion in capital expenditure by 2026, mainly on data centers and chips.
- Big Tech companies are borrowing heavily to fund AI buildouts, raising questions about whether AI returns will justify the leverage.