(Reuters) -Amazon is looking to raise about $12 billion from the corporate bond market in its first such deal in U.S. dollars in about three years, Bloomberg News reported on Monday, as big tech firms increase investments to stay on top of the AI race.
The e-commerce giant filed for a six-part bond sale earlier in the day without disclosing a size, a regulatory filing showed.
As artificial intelligence workloads grow in scale, big technology firms are turning to large-scale debt sales to fund infrastructure expansion plans 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 percentage points above Treasuries, as per the Bloomberg report, citing people familiar with the matter.
Amazon did not immediately respond to a Reuters request for comment.
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.
(Reporting by Harshita Mary Varghese in Bengaluru; Editing by Maju Samuel)
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