TL;DR
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.
Amazon has agreed to a $17.5 billion delayed-draw term loan led by Citigroup, the latest in a borrowing spree fuelled by its race to build AI infrastructure. The cash is available through the end of September. Each draw has a three-year repayment window. JPMorgan Chase, Bank of America, HSBC, and Wells Fargo are among more than a dozen banks in the syndicate.
The loan comes days after Amazon sold C$14 billion ($10 billion) in Canadian dollar bonds, the largest corporate bond sale on record in that currency. Since March, the company has also sold bonds in euros, US dollars, and Swiss francs. As of 31 March, Amazon’s total short- and long-term debt, including lease payments, exceeded $225 billion. A year earlier, that figure was closer to $150 billion.
Amazon said the loan is for general corporate purposes, which may include “supporting business investments, funding future capital expenditures, and repaying debt.” CreditSights analysts said it could help fund Amazon’s equity investments in AI companies. Amazon committed up to $50 billion in cash to OpenAI in February, initially $15 billion with the rest tied to conditions like going public. It also invested $10 billion in Anthropic this year, with up to $15 billion more over time.
The company has said it plans to spend approximately $200 billion in capital expenditure in 2026, mainly on new data centres and chips. Q1 spending alone hit $43.2 billion, the highest among Big Tech. CreditSights also flagged Amazon as a candidate for a future equity sale, following Alphabet’s $84.75 billion offering last week.
The interest rate on the unsecured loan ranges from 0.625 to 0.875 percentage points above SOFR, depending on Amazon’s credit rating. That is cheap debt by any standard, reflecting the market’s confidence in Amazon’s ability to service the borrowing. But the pace of accumulation is notable. A 50% increase in total debt in 12 months is significant even for a company of Amazon’s scale.
Amazon is not alone. Big Tech is borrowing heavily across global debt markets to fund the AI buildout. But the question analysts are starting to ask is whether the AI returns will arrive fast enough to justify the leverage. For now, the market is lending freely. Whether that continues depends on whether the $200 billion in capex translates into revenue growth that keeps pace with the debt.
