Meta pursues $20b bond offering as Big Tech races to fund AI

Major US technology companies are pressing ahead with large-scale fundraising even as market skepticism toward AI investment grows. Meta, Oracle and Google parent Alphabet are all moving to secure financing through corporate bonds and new share issuances to fund the massive capital outlays required to build AI infrastructure.

Bloomberg reported Monday (local time), citing anonymous sources, that Meta is considering issuing at least $20 billion in dollar- and euro-denominated corporate bonds.

No final decision has been made, and the offering size could grow depending on investor demand.

Meta has asked Citigroup and Morgan Stanley to hold investor conference calls Monday and Tuesday.

If the bonds are issued, it would mark Meta's second major fundraising in six months. It would also be the company's first-ever euro-denominated bond offering.

The dollar-denominated bonds are expected to carry maturities ranging from five to 30 years, while the euro-denominated bonds would range from four years to more than 38 years.

Meta raised $25 billion through investment-grade corporate bonds in April, drawing as much as $96 billion in investor demand at the time.

Software giant Oracle also plans to raise $20 billion through bonds and new shares to fund its AI ambitions.

Reuters, citing Oracle materials, reported the proceeds would be used for general corporate purposes including capital expenditures, debt repayment, acquisitions, dividend payments and buybacks.

The $10 billion corporate bond portion consists of six tranches maturing between 2029 and 2046. Specific interest rates, prices and final issuance sizes have yet to be determined.

Oracle said last week that capital expenditures would peak in the current and next fiscal years, and that it plans to raise up to an additional $20 billion for AI-related purposes through fiscal year 2030.

Alphabet also began selling 6 billion euros ($6.71 billion) in corporate bonds Tuesday. Total demand had already exceeded 17 billion euros when the offering was announced.

According to lead manager documents and a filing with the US Securities and Exchange Commission, the bonds carry maturities of two to 19 years and consist of one floating-rate tranche and six fixed-rate tranches.

Pricing is to be set Tuesday.

Alphabet had earlier issued an unusually structured 100-year sterling-denominated bond in February and a 9 billion euro multi-tranche offering in May. The company's share price fell nearly 19 percent in October, its worst monthly performance on record.