META
Bond markets are now funding the future of AI
Meta Platforms is planning to borrow $25 billion through bonds to cover the rising costs of building its AI systems.
The loan would stretch over five to forty years.
The move follows CEO Mark Zuckerberg’s signal that Meta is ramping up spending on data centres and hardware for AI.
Investors took a hit: Meta’s shares dropped about 11.3%, erasing roughly $208 billion in value.
In brief:
Meta to borrow $25bn in bonds to fund AI infrastructure.
Shares dropped ~11.3%, slicing ~$208bn off market value.
Capex target: $72bn this year, likely more in 2026 and beyond.
Debt is the new flex
Meta isn’t the only one borrowing. Major tech companies are taking on debt as they invest heavily in AI infrastructure.
Meta has already raised $27 billion in private loans for its new “Hyperion” data centre, and others like Oracle Corporation have issued similar large-scale bonds.
Overall, tech firms are expected to spend around $400 billion this year on AI infrastructure.
Meta says its total capital spending could reach $72 billion by year-end and exceed $105 billion in 2026, with total infrastructure investment reaching up to $600 billion by 2028 in the US alone.
Every tech giant is hoarding GPUs like it’s toilet paper in 2020. - MG