This article first appeared on GuruFocus.
Amazon.com (NASDAQ:AMZN) is leaning even harder into the AI spending race. Soon after selling the biggest Canadian corporate bond deal on record, the company secured access to a $17.5 billion delayed-draw term loan from a group of banks including Citigroup. The loan will be available until the end of September, and each time Amazon draws on it, the company will have three years from that borrowing date to repay the money.
The timing matters. Amazon has already committed major capital to AI, including as much as $50 billion in cash for OpenAI, starting with an initial $15 billion commitment. Anthropic also said two months later that Amazon agreed to invest another $5 billion, with the possibility of $20 billion more over time. CreditSights analysts Jordan Chalfin and Michael Pugh said the new loan could help fund those equity investments, while also suggesting Amazon could possibly become a future equity-issuance candidate after large stock sales from other major companies including Alphabet, which raised $84.75 billion last week.
This is not just another routine borrowing. Amazon’s unsecured loan will pay 0.625 to 0.875 percentage point above SOFR, depending on its senior unsecured credit rating, with JPMorgan Chase, Bank of America, HSBC, Wells Fargo and more than a dozen other banks also involved. The deal follows Amazon’s C$14 billion Canadian-dollar bond sale, worth about $10 billion, and comes after the company has also sold bonds in euros, US dollars and Swiss francs since March. For investors, the message could be simple: Amazon is raising capital across markets as big tech keeps borrowing heavily to fund data centers, AI model makers and other AI assets.