Amazon plans $25 billion bond sale as AI spending debate weighs on tech

Amazon is preparing to raise at least $25 billion in an eight-part bond offering, CNBC reported Tuesday, adding a large new financing package to a year of heavy artificial intelligence investment by the largest cloud and internet platforms. The planned sale came during a weaker session for AI-linked equities, with the Nasdaq 100 down more than 1% while the S&P 500 was only modestly lower, according to CNBC.

CNBC said Amazon has already raised about $64 billion through offerings earlier this year. People familiar with the matter told CNBC’s David Faber that the company does not plan to issue more debt this year after the latest transaction.

Amazon shares were about 0.7% higher in afternoon trading, CNBC reported.

Debt financing remains tied to AI capital spending

The bond sale highlights how large technology companies are using the debt market to finance data centers, chips and related infrastructure needed for AI services. A multi-part bond offering typically divides borrowing across several maturities, allowing an issuer to spread repayment dates and match funding to long-term investment plans.

CNBC’s Investing Club said the lack of additional planned debt issuance this year raises questions about whether Amazon could hold its capital expenditure expectations steady for the rest of 2026. It also noted that investors may consider whether an equity transaction could become relevant, drawing a comparison with Alphabet. CNBC said Amazon’s earnings report in coming weeks should provide more clarity.

The discussion comes as enthusiasm around AI infrastructure spending has become more uneven. CNBC reported that the Philadelphia Stock Exchange Semiconductor Index has declined in three of the first four trading sessions of July and the third quarter, with the losing sessions averaging about 5.3% declines.

CNBC attributed part of the pressure to investor concern over the duration of the AI capital spending cycle among hyperscale technology companies. It cited Meta’s plan to sell AI compute as one new narrative that has unsettled some investors, who have responded by selling technology stocks that had strong year-to-date gains and sharp advances in late June.

Microsoft shifts some Office AI work in-house

Separately, Microsoft has begun replacing models from OpenAI and Anthropic with internally developed models in Office products including Excel and Outlook, Bloomberg News reported. Bloomberg said the effort is intended to reduce dependence on outside AI models, which can carry high costs.

The shift follows comments by Microsoft Chief Executive Satya Nadella in an interview with The Wall Street Journal last month, according to CNBC, in which the company’s search for lower-cost AI alternatives was discussed. CNBC said many routine tasks in products such as Outlook may not require access to the most powerful external models.

For software providers, the choice of AI model affects both capability and unit economics. More advanced external models can improve performance on complex tasks, but internal or smaller models may reduce inference costs when user requests involve narrower functions inside existing productivity software.

Oil and rates add pressure

Outside technology, U.S. benchmark West Texas Intermediate crude moved back above $70 a barrel after reports that Iran attacked an oil tanker in the Strait of Hormuz, CNBC said. The waterway is a key channel for global energy trade.

CNBC also cited the New York Federal Reserve’s June survey, which showed one-year consumer inflation expectations rising from May to the highest level since September 2023. The combination of firmer oil prices and higher inflation expectations pushed bond yields higher, with the 10-year Treasury yield on pace to close above 4.5% for the first time since June 22, according to CNBC.

CNBC reported that no major U.S. earnings were scheduled after Tuesday’s close or before Wednesday’s open. Weekly mortgage applications and minutes from the June Federal Reserve meeting are due Wednesday, with traders expected to examine the record for signals on how the Kevin Warsh-led central bank is assessing monetary policy for the second half of the year, according to CNBC.

This story draws on original reporting from CNBC.