Amazon secures C$14 billion in a record-setting bond sale in Canadian dollars to finance its AI investments.

      Amazon is set to raise C$14 billion (around $10 billion) through Canada’s largest corporate bond sale to date, surpassing Alphabet’s previous record of C$8.5 billion established in May. According to Bloomberg, this amount comes from investment-grade bonds issued in Canadian dollars. The deal features five tranches of senior unsecured notes with maturities that range from three to 30 years. Pricing for the longest tranche has narrowed by 5 basis points, now sitting at 1.10 percentage points above Canadian government bonds, indicating robust investor interest. The transaction is being managed by JPMorgan, Royal Bank of Canada, Bank of Nova Scotia, and Toronto-Dominion Bank.

      Amazon has indicated that the funds will be allocated for general corporate purposes, which may encompass supporting business investments, funding upcoming capital expenditures, and debt repayment. A key focus for these investments is AI infrastructure. This year, Amazon is expected to spend nearly $200 billion on data centers, chips, and related infrastructure, a significant increase from approximately $83 billion in 2024 and $125 billion in 2025.

      The Canadian dollar issuance represents another phase in Amazon's global debt strategy, which has included raising over $70 billion since the beginning of 2025. This includes a $37 billion deal in US dollars in March, followed by a EUR 14.5 billion offering soon after, and a CHF 2.82 billion bond in Swiss francs issued in May.

      This trend is not exclusive to Amazon; Alphabet has also actively utilized various currencies, issuing bonds in US dollars, euros, sterling, Swiss francs, yen, and now Canadian dollars. Analysts from Bloomberg Intelligence, Robert Schiffman and Alex Reid, noted that Amazon's return to the bond market following the Swiss issuance implies that its anticipated investment in AI for 2027 will be significantly higher than the $200 billion expected this year.

      The five largest hyperscalers—Amazon, Alphabet, Microsoft, Meta, and Oracle—together issued $121 billion in corporate bonds in 2025, in stark contrast to the average of $28 billion per year from 2020 to 2024. UBS credit strategists project that this sector may need to borrow between $230 billion and $240 billion in 2026. Meanwhile, Morgan Stanley and JPMorgan estimate that up to $1.5 trillion in additional debt may be necessary in the coming years to finance the AI expansion at the current pace.

      For now, Amazon's credit situation appears stable, having generated approximately $100 billion in free cash flow in fiscal 2025, with AWS operating margins exceeding 30%. However, the scale of its expenditure necessitates borrowing, even among the wealthiest tech firms, instead of relying solely on cash reserves. The competitive landscape in AI capital expenditure has transformed treasury operations at hyperscalers into a scenario akin to multi-currency sovereign borrowing, with the Canadian dollar being the latest market capable of meeting this demand.