Amazon seeks to raise $12 billion from US bond sale, Bloomberg News reports

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Amazon plans to raise about $12 billion in corporate bonds, its first such deal in U.S. dollars in about three years, Bloomberg News reported on Monday, as big tech firms increase investments to build infrastructure for artificial intelligence.

The e-commerce giant filed for a six-part bond sale earlier in the day without disclosing a size, a regulatory filing showed. The company declined to provide further details on the bond sale when responding to a Reuters request.

As artificial intelligence workloads grow, big technology firms are turning to large-scale debt sales to fund infrastructure expansions that cost tens of billions of dollars.

Initial price discussions for the longest portion of the deal, a 40-year bond, are for a premium of about 1.15 per centage points above Treasuries, Bloomberg News reported, citing people familiar with the matter.

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Last month, Meta Platforms announced its biggest 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. 

U.S. wireless provider Verizon is also reportedly seeking to raise about $10 billion through bond sales to fund its $20 billion deal for Frontier.

Major tech firms including Meta, Amazon and Alphabet are expected to spend $400 billion on AI infrastructure this year, according to Morgan Stanley estimates. 

Amazon has been spending more on AI with its capital expenditure expected to total around $125 billion this year and more the year after.

Proceeds from Amazon's offering may be used for everything, from acquisitions and capital expenditures to share buybacks, according to the Bloomberg report.

Amazon recently announced a $38 billion deal with OpenAI, giving a major lift to its cloud unit after losing ground to Microsoft and Google.

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