Amazon Seeks $25 Billion in New Debt as AI Infrastructure Bonds Sell Off Sharply

Amazon's latest shelf registration adds to roughly $180 billion in cumulative AI-linked debt raised by hyperscalers and chipmakers since 2023. Tuesday's session showed 10-year notes from Microsoft, Google parent Alphabet and Oracle widening 12-18 basis points against Treasuries, outpacing broader investment-grade spreads. The move follows Amazon's $10 billion issuance in May and signals continued reliance on public debt markets to fund data-center capex projected to exceed $200 billion annually across the sector.

Primary documents from SEC filings and company earnings transcripts confirm that 60-70 percent of recent AI infrastructure spend is being financed through incremental leverage rather than operating cash flow. Rating agencies have maintained AAA/AA status, yet order books for new tranches have shortened and required larger new-issue concessions. This pattern mirrors earlier infrastructure cycles where stated demand outran actual utilization rates for 18-24 months.

Investor fatigue appears in reduced oversubscription ratios and rising hedging activity via credit-default swaps on tech names. Central-bank data from the Federal Reserve's primary-dealer statistics show net purchases of corporate bonds by foreign official accounts declining for three consecutive months. Without corresponding revenue inflection from AI services, refinancing costs could rise materially once existing low-coupon paper matures in 2026-2027.

Next earnings cycles will reveal whether utilization metrics justify the debt trajectory; absent clear proof, further spread widening of 25-40 basis points remains probable before year-end.