Amazon borrows $17.5B from banks as AI spending continues

Companies are burning through exorbitant sums of money to keep pace in the AI arms race. Debt is climbing. Amazon has signed a deal to borrow $17.5 billion from a number of financial lenders, according to Bloomberg.

The banks behind the loan reportedly include Citigroup, JPMorgan Chase, Wells Fargo, HSBC, and BofA Securities. The deal has been characterized as a delayed draw term loan, meaning Amazon can draw down the funds on its own timeline rather than taking the full sum upfront, giving it flexibility in how and when the money gets deployed. The loan comes just two days after it was reported that Amazon would also raise $14 billion in a Canadian bond sale, bringing its total new financing to roughly $31.5 billion in the span of roughly 48 hours.

Reuters notes that the new loan will be used for 'general corporate purposes.' TechCrunch has reached out to Amazon for more information. Amazon is hardly alone. To fund new AI infrastructure like chips and data centers, companies are leveraging historic capex.

Increasingly, companies are borrowing money to fund their massive AI buildouts. The question investors and analysts are increasingly asking isn't whether this spending is necessary — it's whether the returns will ever justify it. The scale of the borrowing is striking even by Silicon Valley standards.

About a week ago, Google parent company Alphabet said that it planned to raise $80 billion through a stock sale designed to help 'fund its investments in a balanced way while retaining a healthy balance sheet.' Meta has also announced plans to raise $30 billion in a bond sale — its largest ever. Why this matters: The sheer scale of borrowing by tech giants like Amazon, Alphabet, and Meta underscores the intense pressure to invest in AI infrastructure. As companies continue to pour billions into AI development, questions about the long-term returns on these investments will only grow louder.

For developers, businesses, and consumers, this spending spree could lead to accelerated innovation and new AI-powered products. However, it also raises concerns about the sustainability of this financial model and the potential risks of over-investment. As the AI arms race heats up, market participants will be watching closely to see which companies can successfully translate their massive investments into tangible profits and growth.