Google, Meta, Amazon, Microsoft and Oracle issued $121 billion in debt to fund AI bets — 4x than usual: Report
Five AI hyperscalers — Google, Meta, Amazon, Microsoft and Oracle — are increasing debt four times more than usual this year.
Five major artificial intelligence (AI) hyperscalers are increasingly financing their AI investments through debt as they pledge more money to the cutting-edge technology in hopes of scaling their businesses, according to a new analysis by Bank of America.
Bank of America analyst Yuri Seliger said Google, Meta, Amazon, Microsoft and Oracle together issued $121 billion in debt this year.
Only $27 billion of the $121 billion in debt was used to finance Meta’s new data center in Richland Parish in Los Angeles, Seligar said in a Nov. 17 research note. Additionally, Amazon also issued new debt worth $15 billion on November 17.
To put things in perspective, that $121 in debt is more than four times the average level of debt these companies have issued annually over the previous five years. According to this table from Bank of America, Meta, Google, Amazon, Oracle and Microsoft have issued an average of $28 billion in debt in the last five years.
What is the effect?
According to Yuri Seliger, the unprecedented influx of these investment grade (IG) corporate bonds into the market has increased their “spread.”
Oracle, for example, has increased its debt by 48 basis points (0.48%) since September, according to the note.
“It’s no surprise that this influx of supply has significantly widened hyperscaler spreads. From September 1 to November 14, spreads were +48 basis points wider for ORCL, +15 basis points for META, and +10 basis points wider for GOOGL. This is 27% to 49% wider, significantly underperforming the overall IG index,” Seliger said.
More debt expected
In his memo, Seliger told his clients that the debts were permanent and would even increase.
The analyst expects the debt issued by the five AI hyperscalers to increase by another $100 billion in the next year. While all companies generate enough cash flow to cover their operations, the investment case for these stocks has been complicated by the introduction of debt elements, according to a report by Fortune.
Amazon, Meta and Google are investing heavily in artificial intelligence
Artificial intelligence has taken over the world and has gained momentum, especially in 2025, when major technology companies announced that they will invest billions of dollars in this new tool and claim that it will change the way we work.
Amazon plans to spend nearly $100 billion on capital expenditures in 2025 alone.
Meta, meanwhile, has become an AI hyperscaler, with commitments to invest at least $600 billion in U.S. infrastructure, data centers, and jobs over the next few years. The company plans to spend $70-72 billion on artificial intelligence investment expenditures in 2025 alone.
Google is not far behind. Its parent company, Alphabet, increased its AI spending forecast to $85 billion in 2025. More recently, the company committed to a $15 billion investment in India to build an AI data center.
Microsoft and Oracle also announced billions of dollars worth of investments in AI this year and over the next few years, making them AI hyperscalers.
