AI giants turn to debt to finance tech race (finance.yahoo.com)

Meta raised $30 billion in long-dated bonds this week — a sale reportedly four times oversubscribed — as cash-rich tech companies increasingly turn to borrowing to fund an escalating AI arms race. The issuance, timed after disappointing quarterly results that sent Meta shares down more than 11%, is meant to bankroll rapid AI development and infrastructure build‑out (Meta also announced a joint venture with Blue Owl to raise about $27 billion for data centers). Low corporate borrowing costs, strong cash flow (Meta would have reported roughly $18.6 billion in quarterly net income absent a one‑time charge) and asset-backed security (data centers and GPUs) make lenders comfortable taking on the paper, and investors snapped it up despite worries about AI spending. The move matters because it signals a structural shift: internet giants that historically self‑fund capex are leveraging debt to scale AI infrastructure faster, and markets are receptive — Oracle recently sold $18 billion in bonds and may take on another $38 billion in bank financing. That access won’t extend to unprofitable AI startups (OpenAI, Anthropic, Perplexity), which will likely remain dependent on equity funding because debt would be far costlier and riskier for lenders. The trend concentrates AI infrastructure power in cash‑generating incumbents, lengthens project time horizons, and reduces near‑term financial strain for big players while raising questions about competition and capital allocation in the sector.