Meta, Alphabet, Amazon, and Microsoft are getting hooked on debt to fuel AI boom

Big Tech is becoming hooked on debt to fuel its grandiose visions of AI dominance, a slight shift from years past, when aggressive investments were largely driven by internally generated cash.

The news: AI-related companies have issued about $140 billion in investment-grade bonds year to date, accounting for 49% of the total investment-grade issuance, according to new analysis from the Kobeissi Letter.

In high-yield corporate bonds, AI-related companies have accounted for 38% of total issuance, or roughly $21 billion year to date.

The most headline-making debt raise of the year has been out of Alphabet ( GOOG , GOOGL ).

Alphabet became the first tech company in decades to issue a 100-year bond. In total, Alphabet raised $31.51 billion in February across its global bond offering, tapping sterling and Swiss franc markets alongside US dollar issuance.

“The AI investment boom is reshaping how capital is allocated across the entire financial system,” researchers at the firm said.

The analysis: Google, Amazon ( AMZN ), Microsoft ( MSFT ), and Meta ( META ) collectively plan to allocate $725 billion to capital expenditures in 2026 — up a staggering 77% from last year’s already record-breaking $410 billion.

Amazon is projecting $200 billion in capital expenditures, Alphabet is targeting $175 to $185 billion, Meta is guiding $115 to $135 billion, and Microsoft is tracking toward $190 billion for the calendar year.