Mastodawn

Pass the Dutchie 2d ago

Why does Amazon, a company valued at two and a half trillion dollars, need to borrow 17.5b from banks for Ai? I saw a quote yesterday - "The entire US economy right now is just 7 companies sending a trillion fake dollars back and forth to each other."

Fresh off bond sale, Amazon borrows $17.5B from banks as Ai spending continues

https://techcrunch.com/2026/06/10/fresh-off-bond-sale-amazon-borrows-17-5-billion-from-banks-as-ai-spending-continues/

Fresh off bond sale, Amazon borrows $17.5B from banks as AI spending continues | TechCrunch

Companies are burning through exorbitant sums of money to keep pace in the AI arms race. Debt is climbing.

TechCrunch

AJ Sadauskas 2d ago

@TheBreadmonkey All up, Amazon borrowed ***US$31.5 billion*** in 48 hours, including both bonds and loans, from some of the world's biggest banks.

So what happens if Amazon can't pay the money back?

From the article:

"Companies are burning through exorbitant sums of money to keep pace in the AI arms race. Debt is climbing. Amidst this flurry of activity, Amazon has signed a deal to borrow some $17.5 billion from a number of financial lenders, according to Bloomberg.

"The banks behind the loan reportedly include Citigroup, JPMorgan Chase, Wells Fargo, HSBC, and BofA Securities. The deal has been characterized as a delayed draw term loan, meaning Amazon can draw down the funds on its own timeline rather than taking the full sum upfront, giving it flexibility in how and when the money gets deployed.

"The loan comes just two days after it was reported that Amazon would also raise $14 billion in a Canadian bond sale, bringing its total new financing to roughly $31.5 billion in the span of roughly 48 hours."

https://techcrunch.com/2026/06/10/fresh-off-bond-sale-amazon-borrows-17-5-billion-from-banks-as-ai-spending-continues/

#AIbubble #Amazon #ChatGPT #LLM #OpenAI #Anthropic #Gemini #Copilot #AI

Fresh off bond sale, Amazon borrows $17.5B from banks as AI spending continues | TechCrunch

Companies are burning through exorbitant sums of money to keep pace in the AI arms race. Debt is climbing.

TechCrunch

M Schommer 2d ago

@aj @TheBreadmonkey
Strong 'Too big to fail' vibes...

Benna Radacanu 2d ago

All I need is a measly one million pounds

David Chisnall (*Now with 50% more sarcasm!*)2d ago

@aj @TheBreadmonkey

Amazon's market cap is $2.561 T, so issuing $31.5 B in new shares would have caused slightly more than 1% dilution. Their share price is down about 7% this week, so it looks as if the stock market has decided that taking on that much new debt was a worse choice than issuing more shares.

MacCruiskeen 2d ago

@david_chisnall @aj @TheBreadmonkey Amazon is also holding about $140 billion in cash and short-term investments, according to their financial statements. So, yeah, some money manager decided it was cheaper for them to borrow than to spend their own money. Businesses do this kind of thing all the time. But it means that even Amazon has finite resources--they can't realistically spend hundreds of billions without having any idea how that is coming back.

AJ Sadauskas 2d ago

@maccruiskeen @david_chisnall @TheBreadmonkey Amazon Aldo reportedly has over $225 billion in short- and long-term debt, up from $150 billion a year earlier.

So previously debt roughly matched cash and short-term investments. Debt now significantly exceeds cash and short-term investments.

Analysts think there'll also be an equity sale *on top of* this debt:

"As of 31 March, Amazon’s total short- and long-term debt, including lease payments, exceeded $225 billion. A year earlier, that figure was closer to $150 billion.
...
"The company has said it plans to spend approximately $200 billion in capital expenditure in 2026, mainly on new data centres and chips. Q1 spending alone hit $43.2 billion, the highest among Big Tech. CreditSights also flagged Amazon as a candidate for a future equity sale, following Alphabet’s $84.75 billion offering last week."

https://thenextweb.com/news/amazon-17-5-billion-loan-citigroup-ai-spending

Amazon takes on $17.5 billion in new debt as AI spending pushes total borrowing past $225 billion

Amazon has agreed to a $17.5 billion delayed-draw term loan led by Citigroup, the latest in a borrowing spree fuelled by its race to build AI infrastructure. The cash is available through the end of September. Each draw has a three-year repayment window. JPMorgan Chase, Bank of America, HSBC, and Wells Fargo are among more […]

The Next Web

Aoi_X_Kaizaki 2d ago

@TheBreadmonkey AI spends money on things when Amazon company doesn't have. Is that what it's like being married?

Catherine is not complacent 2d ago

@Aoi_X_Kaizaki @TheBreadmonkey not in my house.

Draken BlackKnight 2d ago

@TheBreadmonkey
I think that was a @pluralistic quote.

Funky Bob 2d ago

@TheBreadmonkey Is it as simple as: loans don't accrue tax obligations?

tranarchy_a_genderqueer

@TheBreadmonkey you don't gamble away your own money, silly.

System Adminihater 2d ago

@TheBreadmonkey privatize profits socialize losses.

Mathias Hasselmann 2d ago

@TheBreadmonkey What's the common name for this kind of fraud?

nicolaottomano 2d ago

@taschenorakel @TheBreadmonkey Maybe Ponzi scheme?

@nicolaottomano @taschenorakel @TheBreadmonkey

Nope, it's taxpayers money will save the banks when trillion dollar companies won't pay their loans. That's how this is called.

Beldarak 2d ago

@taschenorakel @TheBreadmonkey

Capitalism

Mike Anderson 2d ago

@TheBreadmonkey they asked Kiro what to spend the money on, and it said tungsten cubes.

Kees N ✅🔻2d ago

@TheBreadmonkey
> "Why does Amazon, a company valued at two and a half trillion dollars, need to borrow ..."

Because US markets systematically overvalue those companies. Those are not real dollars, just high expectations.

@knu
… and animal spirits. 😀

@TheBreadmonkey

@TheBreadmonkey Almost like the global economy is sitting on a house of cards, and many are suffering, while the rich are partying. Just like The Roaring Twenties . . . Oh. Oh no.

Ranunculus Teapot 2d ago

@TheBreadmonkey they borrowed because they *could* not because they *needed* to. AI finance circle jerk aside, the big shots have less risk and more reward when they spend borrowed money instead of their own

@TheBreadmonkey probably because if you're a company with trillions you can borrow money for next to nothing.

contrasocial 2d ago

@TheBreadmonkey

Game of financial hot potato they are playing, and they're all looking for a way to toss the potato to the tax payers right before the bubble bursts. They already tried with the recently proposed exceptions for the stock index to allow SpaceX/OpenAI etc. skip the truing up period for their IPOs and do a rug pull.

Really important that we don't bail them out in any way, let them fail regardless of how big or which "important" people unwisely invested in the Wrong Answer Machine

maunzCache 2d ago

@TheBreadmonkey Too big to fail

Nu Modular 2d ago

@TheBreadmonkey #Capitalism #Grift #Greed #AbuseOfPower remove #TechBros #FossilFuels abusers now.

NosirrahSec 🏴‍☠️ guillotine enthusiast 2d ago

@TheBreadmonkey This is an honest, true question on economic theory that I know fuck-all about:

If theoretically this was a literal scheme to move trillions around through X number of organizations to appear as legitimate economic activity, would it then be indistinguishable to the general populace as manipulation and just plain old "capitalism"?

Bruno Parga 2d ago

@TheBreadmonkey company valuation is not money they have in the bank.

@TheBreadmonkey

Why would you spend your own money when you can loan other's money? Then you can spend your own money on something else. Also, having debt lowers taxes as well.

Money becomes cheaper over time due to inflation and prices raising and stuff. So, taking a loan can be more beneficent than spending your own money.

Also, our financial system is built on debt. More debt means better economy.

So that's 3:0 for loan vs. own money.

🇺🇦 haxadecimal 🚫👑2d ago

@TheBreadmonkey
Even if it wasn't kiting, a company's market valuation is almost entirely unrelated to their liquid assets.
But in this case, I suspect you're right, that it's part of the general AI finance kiting. Another thing that billionaires can get away with, but you or I would be jailed for.

@TheBreadmonkey
I love techcrunch telling bloomburg we're all coming from twitter. 😐

Benna Radacanu 2d ago

@jeffreyolivier

Oof

The Long Tail 2d ago

@TheBreadmonkey When the music stops, some companies will not have chairs...

@sleepyfox @TheBreadmonkey Unfortunately, a large amount of people won't either. Gonna make the Great Depression look like a good time.

João Pinheiro 2d ago

@TheBreadmonkey Because that's how they make money without money...

RealGene ☣️2d ago

@TheBreadmonkey
Paraphrasing J. Paul Getty:

"If you owe the bank $100, that's your problem. If you owe the bank $17.5 billion, that's Social Security and Medicare's problem.'

Incident Creator ❎2d ago

@TheBreadmonkey
Because the value in the company is locked up in its just-in-time infrastructure, not available as ready cash. So to get cash it has to borrow against its infrastructure or sell shares (which is much the same thing but more regulated).

Negative12DollarBill 2d ago

@TheBreadmonkey
The entire US economy is those companies *announcing* that they're *planning* to spend *up to* X billion dollars on a thing that's never going to happen and the media reporting it as if it already happened.

CassandraVert 2d ago

I think i first saw that idea last year.
Spinning plates.
Our GDP is inflated by extra money circulating.

manchicken 1d ago

@TheBreadmonkey Because if they don't keep throwing more money into the furnace, investors will think they're out of money to throw into the furnace, or that the furnace has cooled to the point where it can no longer burn money.