Big 5 AI ‘hyperscalers’ have issued $121 in debt to fund operations this year

Google, Meta, Amazon, Microsoft and Oracle issued $121 billion in debt to fund AI bets — 4x than usual: Report

Five AI hyperscalers, namely Google, Meta, Amazon, Microsoft and Oracle, are increasing debt this yea, four times than that of usual.

According to a new analysis by the Bank of America, the big five artificial intelligence (AI) hyperscalers have been increasingly funding their AI investments through debt, as they pledge more money into the latest technology in hopes of scaling their business.

Bank of America analyst Yuri Seliger said that Google, Meta, Amazon, Microsoft and Oracle together have already issued $121 billion in debt this year.

In his research note dated November 17, Seligar said that out of the $121 billion debt, $27 billion alone was used to fund the new data centre of Meta at Richland Parish in Los Angeles. Additionally, Amazon has also issued a new debt amounting $15 billion on November 17.

To put things into perspective, this $121 in debt is more than four times the average level of debt that these companies issued annually over the previous five years. According to this Bank of America chart, in the past five years, Meta, Google, Amazon, Oracle and Microsoft have issued a debt of $28 billion in average.

What's the impact?

According to Yuri Seliger, the unprecedented influx of these investment-grade (IG) corporate bonds into the market has increased their “spread”.

Oracle has, for example, increased its debt by 48 basis points (0.48%) since September, according to the note.

“Not surprisingly, this deluge of supply has widened hyperscaler spreads materially. From Sep 1st to Nov 14th, spreads are +48bps wider for ORCL, +15bps wider for META, and +10bps wider for GOOGL. That's 27%-49% wider, significantly underperforming the overall IG index,” Seliger said.

More debts expected

In his note, Seliger told his clients that the debts are here to stay and even increase.

The analyst expects that in the next one year, the debt issued by the five AI hyperscalers will increase by a further $100 billion. According to a report by Fortune, while all the companies generate more than enough cash flow to cover their operations, the investment case for these stocks have become complicated due to the arrival of debt elements.

Amazon, Meta, Google bet big on AI

AI has taken over the world, especially gaining momentum in 2025 as big tech companies jumped ahead to announce billions of dollars of investment into this new tool, claiming it will transform how we function.

Amazon has plans to spend approximately $100 billion in capital expenditures in 2025 alone.

Meanwhile, Meta has also become an AI hyperscaler with its pledge of investment at least $600 billion over the next few years for US infrastructure, data centres, and jobs. In 2025 alone, the company plans to spend $70-$72 billion in AI capex.

Google is not far behind. Its parent Alphabet increased its AI expenditure forecast to $85 billion in 2025. More recently, the company committed a $15 billion investment in India to build an AI data centre.

Microsoft and Oracle have also announced billions of dollars worth of investment in AI this year and over the next few years, making them AI hyperscalers.

Source: LiveMint
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