Meta Raises $15 Billion in Bonds to Fund AI Expansion

• Meta raised $15 billion in bonds as AI spending is projected to be $135 billion to $145 billion this year.
• Orders for Meta’s five-part bond sale reportedly reached $58 billion, about 3.9 times its size.
• Oracle’s CDS reached 294.4 basis points as convertible bonds fell 6.4% in October.

Meta Platforms is turning to bond investors to help pay for its expanding artificial intelligence infrastructure, raising $15 billion through a five-part U.S. dollar bond offering. The sale comes as the company considers a possible $97.5 billion equity raise and projects capital spending of $135 billion to $145 billion this year, largely for data centers, computing capacity and cloud expansion.

The financing raises a question facing the industry: Is the next phase of the AI race being decided not only by model quality, but by which companies can secure capital at a manageable cost?

Meta’s Debt Sale Draws $58 Billion in Orders

The disclosed terms include $3.25 billion in notes due in 2031 with a 5.85% coupon and $3.25 billion due in 2033 at 6.25%, according to a regulatory filing. The five-part deal also includes a longest-dated tranche due in 2056, but the filing did not detail the remaining portions.

Orders reportedly reached $58 billion at one point, about 3.9 times the offering’s size. Moody’s assigned the debt an Aa3 rating and said it expects Meta to maintain low-risk financial policies and a positive net cash position as spending rises. LSEG data put Meta’s total debt at $83.67 billion on Sept. 30.

In addition, Meta is preparing its first euro-denominated bond sale, which could price as soon as Wednesday and raise the equivalent of $5 billion to $10 billion. Combined dollar and euro fundraising could reach $20 billion to $25 billion, depending on final pricing.

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Big Tech Turns to Bond Investors

Other large technology companies are also seeking debt-market funding for AI expansion. Alphabet is set to raise €6 billion, or about $6.7 billion, in its second euro bond sale this year. Microsoft expects to raise $25 billion, while Oracle has filed to raise $20 billion, divided equally between stock and debt.

Borrowing costs have risen for some issuers. Alphabet’s credit default swaps reached 91.6 basis points last week, nearly three times their level a year ago. Microsoft’s have doubled, while Oracle’s stood at 294.4 basis points, up from below 100 a year earlier. Moody’s kept Oracle’s rating two notches above junk on Monday and maintained a negative outlook.

Funding Costs Vary Across the AI Supply Chain

Meta raised $25 billion in investment-grade debt in April and $30 billion last year. Its cash generation and Aa3 rating set it apart from more-leveraged companies, though the latest borrowing adds to a broader funding push.

Convertible bonds, often used by riskier AI companies, fell by 6.4% in October, their worst month since 2008, according to a Barclays note. Strategists cited financing concerns for highly leveraged neocloud and data-center issuers.

Meta’s latest bond sale highlights how the AI infrastructure race is creating substantial financing needs across the technology sector. While cash-rich companies such as Meta can access debt markets at relatively favorable ratings, rising borrowing costs and weaker demand for riskier financing could create challenges for more leveraged AI and data-center operators. As spending on computing capacity continues to grow, access to affordable capital may become an increasingly important factor in determining which companies can sustain their AI expansion.

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Related: Meta’s AI Spending Raises the Stakes for Decentralized AI Infrastructure