America’s largest tech companies have doubled their borrowings over five years, adding roughly $350 billion of debt to bankroll an aggressive buildout of AI-centric data centers. Alphabet, Amazon, Meta, Microsoft and Oracle have tapped bond markets in multiple currencies as they chase future AI revenue, even as cracks in investor appetite emerge. A $25 billion Amazon deal drew a cooler-than-usual reception this week, a reminder that demand for tech paper has limits.
For now, interest costs remain manageable for the most profitable players: the group’s interest expense topped $10 billion last year, still dwarfed by Google’s $64 billion in free cash flow over the March quarter. Others are feeling the pinch. Amazon posted negative free cash flow in the March quarter, and S&P Global Ratings cut Oracle to the lowest investment-grade tier, citing accelerating AI spend and leverage of about 2.5 times sales in 2025. The sector’s economics are shifting as software giants morph into heavy infrastructure owners—first with cloud, now with larger, chip-intensive AI facilities—dragging on near-term cash flow in pursuit of long-term dominance.
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