TMTPOST --   Amazon.com Inc. earlier this week raised 15billion in its first U.S. dollar bond offering in three years, joining a wave of Big Tech's tapping debt markets to fund artificial intelligence ( AI ) infrastructure.

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The   new Amazon bond sale   was   to   attracted   about   80 billion in demand at its peak, Bloomberg reported on Monday.   The deal will   reportedly   finance acquisitions, capital expenditures and share buybacks as the e-commerce and cloud computing leader races to expand its data center capacity.

The bond sale, which exceeded initial estimates   of   $12   billion,   comes   amid   an   aggressive   AI   buildout   across   the   tech   sector.   According   to   Bloomberg,   the   issuance   spree   from   technology   companies   has   helped   push   global   debt   issuance   to   a   record   of   more   than   $6 trillion this year.

Amazon sold notes in six parts, according to Bloomberg. Pricing on the longest portion, a 40-year bond, tightened to 0.85 percentage point above Treasuries from 1.15 percentage point initially. Orders were cut in half as borrowing costs fell during the sale process. Goldman Sachs Group Inc., JPMorgan Chase and Morgan Stanley managed the transaction.

JPMorgan Chase expects the wave of spending to finance AI investments to drive issuance in the U.S. high-grade market to a record $1.81 trillion next year. JPMorgan noted this is an "opportune" time for Amazon, which has primarily relied on its own cash flow, to incorporate debt into its capital structure for funding flexibility.

The proceeds will support business investments, fund future capital expenditures and repay upcoming debt maturities, Amazon said. The company last tapped the U.S. investment-grade market in November 2022 when it raised $8.25 billion.

Amazon's bond sale follows similar moves by major technology firms seeking to finance AI infrastructure. Google parent Alphabet Inc. earlier this month sold   $25   billion   of   debt   in   the   U.S.   and   Europe.   Meta   Platforms   Inc.   issued30 billion of corporate bonds last month, the biggest offering of the year, while Oracle Corp. raised $18 billion through investment-grade notes in September.

Amazon is the world's largest seller of rented computing, critical to powering artificial intelligence systems. The company has been investing heavily in data centers and chips to build and run AI models capable of generating text or images and automating processes.

Amazon in   late   October said it made capital expenditures ( Capex ) of nearly   $90   billion   in   the   first   nine   months   of   the   year   and   expected   to   spend   $125 billion for the full year. Earlier this month, the company's cloud unit signed a $38 billion deal to supply OpenAI access to hundreds of thousands of Nvidia Corp. graphics processing units ( GPUs )   as part of a seven-year computing agreement.

On October 29, Amazon said one of its largest AI data center investments, Project Rainier, was fully operational. The   $11   billion   facility   is   intended   to   train   and   run   models   from   Anthropic,   in   which   Amazon   has   invested   $8 billion. Amazon said the startup will use 1 million of its custom Trainium2 chips by the end of 2025.

Amazon's Capex   are expected to top $147 billion next year — roughly three times the level seen in 2023 — according to analyst estimates compiled by Bloomberg. The company's data center power capacity has doubled since 2022, and CEO   Andy Jassy expects it to double again by 2027.

Amazon reported on October 30 that sales for the third   quarter rose 13% year-over-year ( YoY )   to   $180   billion,   while   net   profit   soared   39%   YoY to   $180   billion. Revenue from Amazon Web Services   ( AZW )   climbed 20% to   $33   billion   for the September   quarter — the   fastest   growth   rate   since   2022--exceeding   analyst   estimates.Operating   income   at   AWS   rose   9%   YoY to   $11.4 billion, accounting for about two-thirds of Amazon's total operating profit.

Amazon   expected fourth-quarter sales between   $206   billion   and   $213   billion,   and   operating profit between $21billion   and   $26 billion   as it enters the busy holiday shopping season.

Jassy told analysts that customers were buying cloud-computing and AI services as fast as Amazon could make them available given capacity constraints. "Today overall in the industry, maybe the bottleneck is power," Jassy said. "I think at some point it might move to chips."