Amazon secures $17.5B loan to fund AI spending spree

Amazon ↗2.90% disclosed a $17.5 billion senior unsecured term loan led by Citibank ↘0.50% in an SEC filing, with commitments expiring Sept. 30.qz
The loan follows a record-setting C$14 billion Canadian dollar bond offering and supports Amazon’s planned $200 billion in capital expenditures this year, mostly for AI and AWS infrastructure.reuters
Alphabet ↗1.48%, Microsoft ↗0.13%, Meta ↗1.70%, and Amazon are collectively projected to spend up to $725 billion on capex in 2026, increasingly funded through debt markets.statista

Amazon Secures $17.5 Billion Loan Led by Citigroup to Fund AI Buildout

Amazon has secured a $17.5 billion delayed draw term loan from a syndicate of banks led by Citibank, the company disclosed in a regulatory filing on Monday, as it taps debt markets to help finance a record $200 billion capital spending plan for 2026.

A Flexible Credit Line for AI Infrastructure

The senior unsecured facility, disclosed in a Securities and Exchange Commission filing, allows Amazon to draw funds as needed rather than taking the full amount at once. The commitments expire on September 30, 2026, unless the total is borrowed before then, with any amounts drawn repayable within three years of the borrowing date. Interest is based on Amazon’s choice of a floating rate or a term SOFR rate, with a margin of 0.625% to 0.875% depending on the company’s credit ratings. The agreement imposes no financial covenants.qz

The loan comes just days after Amazon completed a C$14 billion ($10.04 billion) Canadian dollar-denominated bond sale — the largest corporate bond offering in Canadian history — with maturities ranging from 2029 to 2056.reuters

Big Tech’s Borrowing Binge

The deal reflects a broader shift among technology giants toward external financing as AI spending eclipses cash generation. Amazon plans to spend $200 billion on capital expenditures in 2026, up more than 50% from $131.8 billion in 2025, with the bulk directed toward AWS data centers and AI infrastructure. CEO Andy Jassy said during Amazon’s fourth-quarter earnings call in February that the company is “monetizing capacity as fast as we can install it”.ciodive

Combined, Amazon, Alphabet, Microsoft, and Meta are projected to spend as much as $725 billion on capital expenditure this year. Morgan Stanley analysts have forecast Amazon could face negative free cash flow of nearly $17 billion in 2026, helping explain the company’s turn to debt markets. According to Reuters, major tech firms raised over $100 billion in bonds in 2025, and borrowing has accelerated further this year.reuters

The Return Question

The Bank for International Settlements noted in a March report that hyperscaler capex now consumes an unprecedented share of operating cash flows, forcing companies into what it called a “more perilous phase” of AI investment characterized by growing reliance on external financing. Amazon’s AWS division grew revenue 24% year over year in the fourth quarter of 2025, its fastest pace in 13 quarters, but analysts continue to scrutinize whether returns will justify the scale of investment.bis