Microsoft Plans $25 Billion Bond Sale to Help Fund AI Infrastructure Expansion

Microsoft announced plans on Thursday to raise $25 billion through a bond offering, drawing on its strong credit standing to help pay for a major expansion of its infrastructure.

The company carries a top-tier AAA rating from credit agency S&P. Management is aiming for $170 billion in capital expenditures in 2026 as it works to satisfy heavy demand from artificial intelligence labs Anthropic and OpenAI, along with other customers.

In a statement, Microsoft said it intends to put the net proceeds toward "general corporate purposes," which could include working capital, capital expenditures, repurchases of capital stock, acquisitions and the repayment of existing debt. The company expects the offerings to close on Nov. 4.

Microsoft is not the only large technology company turning to the bond market. Amazon and Alphabet have both tapped it this year to support infrastructure projects, and AI-focused cloud provider CoreWeave has relied on debt to widen its data center footprint. The backdrop is less forgiving than it once was, since investors have grown more nervous about companies carrying large debt loads as central bankers raise interest rates to combat inflation.

Chief financial officer Amy Hood signaled on the company's earnings call on Wednesday that Microsoft would draw on additional sources of funding alongside the cash it generates itself, when market conditions look attractive. She pointed to leasing as one vehicle the company has already been using. "We're fortunate to have access in the debt markets, given where our ratings are, and we haven't yet tapped that," she said.

Microsoft's cash position also sets it apart from several peers. The company reported positive free cash flow on Wednesday. Alphabet, by contrast, posted negative cash flow for the second quarter in a row. Meta said last week that its free cash flow was negative, and Amazon reported negative free cash flow on Thursday.

Oracle, meanwhile, also moved to raise money on Wednesday, unveiling plans for $10 billion in new debt. The company said it expects to return to positive free cash flow in the second half of its 2028 fiscal year.