Giant Raises $725 Billion in Debt to Tackle AI Arms Race: Amazon and Google Engage in Cross-Border Tax Arbitrage, Meta Faces Rate Hike

According to Dynamics Beating monitoring, in response to the expected surge in AI capital expenditure to $725 billion, Silicon Valley giants are intensively unleashing a global debt issuance frenzy. Faced with massive computing power expenses, cross-currency bond issuance is becoming a core strategy for tech giants to "shear the low-interest loan sheep."

Amazon and Google's parent company Alphabet are the main players in this multinational arbitrage. Following a record-breaking Eurobond issuance in March, Amazon is currently preparing to issue Swiss Franc bonds ranging from 3 to 25 years for the first time. Meanwhile, Alphabet, whose capital expenditure for this year has been raised to $190 billion, is planning its debut bond issuance in the Japanese Yen market after issuing bonds in Euro, Canadian Dollar, and Swiss Franc. Bloomberg analysts pointed out that by leveraging the ultra-low interest rates in Japan and Europe, these two giants can raise a huge amount of funds at a very low cost, allowing them to continue to heavily invest in computing power without sacrificing domestic financial flexibility.

However, Meta is struggling in the same "leveraging debt to buy computing power" path. Despite just completing a massive $250 billion investment-grade bond offering, due to Zuckerberg's admission during the earnings call of a lack of a "specific plan" for AI monetization, Meta's bond issuance incurred a higher risk premium from Wall Street and saw a significant reduction in subscription size. In stark contrast, Microsoft has become the only company among the Big Four to solely rely on its robust operating cash flow to withstand massive AI expenditures, completely bypassing this wave of debt issuance.