From Wall Street to London! Amazon (AMZN.US) issues its first GBP bonds, using diversified financing needs to refute the AI bubble

According to Zhitong Finance APP, Amazon (AMZN.US), the US e-commerce and cloud computing giant, has appointed banks to arrange its first pound sterling-denominated bond issuance, with the transaction expected to be launched as soon as Wednesday. Currently, global hyperscale cloud service providers are continuously raising debt worldwide to fund artificial intelligence infrastructure construction. The unprecedented "AI credit" boom is pushing American tech giants' AI compute infrastructure financing landscape from the dollar market to the global capital pool. Previously, in March, Amazon raised about 14.5 billion euros through an eight-tranche bond issuance, and now is preparing for its first sterling-denominated bond issue.

This year, giants like Google and Amazon have been building large, long-term, diversified sovereign currency-based financing structures to maximize the mitigation of negative impacts from AI bubble concerns and to prevent the exhaustion of liquidity backup resources supporting AI compute infrastructure expenditures.

In August, Google's parent company Alphabet completed its first Australian dollar-denominated corporate bond issuance. Also in August, the company completed a $25 billion bond issuance in the US dollar market and, in 2026, had issued corporate bonds in Swiss francs, British pounds, euros, Canadian dollars, and Japanese yen. The company also recently raised nearly $85 billion through an additional stock offering.

Alongside Meta Platforms (Facebook’s parent company), Oracle, Amazon, and even Microsoft, US tech supergiants have already raised hundreds of billions of dollars in 2026 via dollar and other sovereign currency financing to support their ambitious AI strategies.

Although large tech companies’ massive investments in AI have helped push stocks with AI compute themes to all-time highs, in the context of enormous corporate credit issuance, higher corporate bond yields and the yield curve on US Treasuries with 10-year or longer maturities have further intensified market debate: can these companies generate enough profit from such massive investments in AI compute infrastructure, and are the risks of the "AI bubble" bursting—stemming from ever-growing corporate bond issuances, rising yields, and default expectations—escalating?

Financing map expands further! Amazon taps sterling bond market for the first time

Google parent Alphabet and Amazon are leveraging their AA credit ratings, strong cash flows from search/e-commerce/cloud businesses, and robust AI compute rental/sale revenue growth to transform these strengths into global, low-cost, long-term capital. By diversifying currencies and investor base, they avoid overwhelming the dollar bond market with AI-related massive supply. These latest developments in the AI credit market can indeed significantly ease the panic about an "AI bubble/unsustainable financing" relating to Alphabet, though they cannot completely dispel controversy over a bubble within the whole AI industry.

According to a source who asked not to be named because the information is not public, the company plans to issue several tranches of bonds with maturities ranging from 3 to 19 years, arranged by JPMorgan, Barclays, HSBC, and NatWest Group.

This online retail and global cloud computing giant debuted euro bonds in March, hitting a record for euro corporate bond issuance. Subsequently, the company entered the Swiss franc bond market, issuing a record six tranches. Overall, Amazon and Google’s parent Alphabet have become the largest issuers among hyperscale cloud service providers in 2026, with Amazon’s outstanding debt securities, converted to US dollars, already exceeding $92 billion, slightly ahead of Alphabet.

Amazon also leads hyperscale cloud providers in total debt. Microsoft, second globally by cloud market share, only trails Amazon, but Amazon's debt is almost double that of Microsoft, its nearest rival. Amazon is planning unprecedented capital expenditures of $220 billion this year, with CEO Andy Jassy stating that most will be used for AI compute infrastructure expansion.

Given the unprecedented scale and speed of such bond issuances, investor sentiment in tech giants’ stock and bond market pricing has shown weakness this year. Recently, demand for newly issued debt appears to have softened, and, combined with rising long-term US Treasury yields, the widening spreads at issuance have driven up debt financing costs.

Global capital rushes into the AI credit market as global AI compute investment boom faces a major yield test

Amazon raised €14.5 billion through eight bond tranches in March and is now preparing for its first sterling bond. According to ECB research published on August 31, the outstanding volume of euro bonds from hyperscale cloud providers is around €40 billion, and large US tech firms alone account for nearly 10% of annual new non-financial corporate euro bond issuance. Cross-currency financing not only expands the investor base and spreads out issuance pressure, but also matches overseas spending, and—via debt currency and investor base diversification—maximizes the ability to avoid an AI bubble burst. However, the concrete cost advantages depend on bond coupons, maturity, as well as currency hedging and cross-currency swap costs.

Alphabet’s diversified currency financing practice is especially notable: in February this year, it issued £5.5 billion in bonds, including a £1 billion centennial bond maturing in 2126 with a 6.125% coupon; in August, it entered the Australian dollar market for the first time, raising A$5.5 billion (about $3.89 billion), with orders exceeding A$18 billion—3.27 times the issuance—while its 20-year bonds came with 6.9% coupons. From the UK's ultra-long-term capital to Australia’s domestic bond investors, AI infrastructure expansion is soaking up savings from different markets.

Financing tools are expanding too. Oracle announced in February plans to raise $45–50 billion in 2026 through debt and equity financing (roughly half each) to fund contracted cloud capacity build-outs. In August, Nvidia announced partnerships with Apollo, BlackRock, Blackstone and others to create an independent compute financing platform, aiming to mobilize over $500 billion in third-party capital, subject to final agreements. This all means AI compute infrastructure is increasingly linking tech companies' balance sheets, public bond markets, and institutional capital, making financing capacity an important condition for accelerating expansion.

However, with the 10-year US Treasury yield nearing 5%, AI capital expenditure is undergoing a strong financing stress test. As US federal debt surpasses $40 trillion, and the 10-year Treasury yield reaches about 4.8%, Rockefeller International Chairman Ruchir Sharma sees a ‘decisive breakthrough at 5%’ as a significant potential signal for impacting AI’s boom. He notes the logic: increased government borrowing and fiscal risk premium could push up baseline financing costs; tech giants would then have to offer higher returns to keep attracting the capital needed to build AI infrastructure.

He compares about $200 billion in annual AI application revenue with over $1 trillion in infrastructure investment, highlighting the financing pressure from front-loaded investment and lagging returns. The application revenue and infrastructure scale figures cannot be directly subtracted to calculate an industry funding gap, but the impact of rising external financing costs is clear—every 100 basis-point increase in rates on $100 billion new borrowing adds $1 billion in annual interest expenses. Meanwhile, higher discount rates lower the present value of long-term cash flows, making long-duration, continuously financed projects face dual profitability and valuation pressures.