Has the AI financing frenzy cooled down? Amazon.com, Inc. (AMZN.US) faces cold reception in $25 billion bond subscription, putting giant debt feast to the test.

As investment in artificial intelligence (AI) infrastructure continues to increase, large-scale bond issuance is rapidly becoming the main financing method for US tech giants. What used to only appear in large-scale mergers and acquisitions, "mega bond issuance" has now become the "standard configuration" for tech giants such as Amazon.com, Inc. (AMZN.US), Alphabet (GOOGL.US), NVIDIA Corporation (NVDA.US), Meta (META.US), Oracle Corporation (ORCL.US), and SpaceX (SPCX.US) to raise funds for AI investments. However, faced with the influx of massive financing into the market, investors are starting to show signs of "investment fatigue". Amazon.com, Inc. completed a $25 billion investment-grade bond issuance this week, which is the seventh scale of $25 billion or more in tech corporate bond financing this year, exceeding the total sum of the previous six years. However, market demand has noticeably cooled. Amazon.com, Inc.'s bond issuance ultimately received around $40 billion in subscriptions, only 1.6 times the issuance size, significantly lower than the subscription heat during a similar financing in March of this year, and below the average level of large tech bond issuances this year. Analysts point out that while mega-scale financing helps tech giants quickly raise the funds needed to build AI infrastructure, the continuous influx of large bond issuances is gradually approaching investors' allocation limits. Brij Khurana, portfolio manager at Wellington Management, said that the market expects a significant amount of bond supply in the future, so investors are unwilling to allocate excessive positions to a single issuer because these companies are likely to return to the bond market for financing in a few months. Similar signs have also appeared with SpaceX. When the company issued $25 billion in bonds last month, the final subscription size was around $73 billion, and after the issuance, the bonds quickly weakened in the secondary market, showing that some investors chose to take profits, which is not common in large investment-grade bond issuances. Data shows that this year, Amazon.com, Inc., Alphabet, NVIDIA Corporation, Meta, Oracle Corporation, and SpaceX have raised a total of approximately $182 billion through US dollar investment-grade bond financing, compared to less than $13 billion during the same period last year. The bond issuance size of these companies accounts for nearly 15% of the total issuance of investment-grade bonds in the US in 2026, contributing to over half of the new supply this year. However, from the issuer's perspective, large-scale bond issuance still has clear advantages. Dan Mead, head of investment-grade bond underwriting at Bank of America Corp, said that for tech companies with massive financing needs, entering the bond market for financing once or twice a year not only reduces financing costs but also helps reduce market risks during the issuance process. At the same time, large-scale bond issuance also has certain attractions for investors. On one hand, due to the large number of holders, bonds typically have better liquidity after listing; on the other hand, new bond issuances often provide higher yields than existing bonds. Taking Amazon.com, Inc.'s bond issuance as an example, the yield on the new bonds is about 12 to 22 basis points higher than its existing bonds, while the average premium for new investment-grade bond issuances this year is only about 4 basis points. Gregoire Pesques, Global Chief Investment Officer of Fixed Income at French Oriental Wealth Asset Management, believes that the continued issuance of bonds by large tech companies not only increases market supply but also helps improve bond market liquidity, creating more relative value trading opportunities for investors. Looking back in history, mega-scale bond issuances have traditionally served large M&A transactions. For example, Verizon (VZ.US) issued $49 billion in bonds in 2013 to acquire Verizon Wireless shares held by Vodafone; Anheuser-Busch InBev SA/NV Sponsored ADR (BUD.US) issued $46 billion in bonds in 2016 to fund the acquisition of SABMiller. Today, this record is being constantly refreshed by the AI investment frenzy. JPMorgan Chase predicts that by 2030, global AI infrastructure investment will reach $55 trillion, with approximately $21 trillion in data center financing to be completed through the investment-grade bond market in the next five years. However, some institutions have warned that as the AI investment cycle matures, the market may pay more attention to the profitability of related projects in the future. Scott Kimball, Chief Investment Officer of Fixed Income at Loop Capital Asset Management, said that most of these AI bonds have just been issued, but with changes in the economic environment and a reevaluation of AI investment returns by the market, there is a possibility of repricing these bonds in the future.