Microsoft Turns To Wall Street For $25 Billion As AI Spending Bill Hits $170 Billion

Microsoft was seeking to raise at least $25 billion in its first U.S. bond sale in more than nine years Thursday as the technology giant pursues a massive artificial intelligence expansion expected to push its capital spending to approximately $170 billion in 2026.

The planned borrowing marks Microsoft’s return to the American investment-grade bond market for the first time since 2017, underscoring the costs associated with building the infrastructure powering the AI boom. The offering follows the company’s disclosure Wednesday that it expects to spend more than $50 billion on capital expenditures during the current quarter alone, raising questions about how even the nation’s most profitable technology companies will finance their growing AI ambitions.

Microsoft is marketing the bonds across ten tranches with maturities ranging from two to 40 years, according to Bloomberg. The company last tapped the U.S. investment-grade bond market in 2017, when it raised $17 billion.

The proceeds are expected to support general corporate purposes, including capital expenditures, working capital, acquisitions, share repurchases and the repayment of existing debt. Microsoft has not indicated that the entire offering will be dedicated to AI investments.

The borrowing follows Microsoft’s fiscal first-quarter earnings call Wednesday, when Chief Financial Officer Amy Hood outlined the company’s infrastructure spending requirements and acknowledged that additional financing could supplement the cash generated by its operations.

“To complement cash generated by the business and preserve financial flexibility, we will access additional sources of funding when we believe it is attractive to do so,” Hood said during the call.

Microsoft reported $45.2 billion in capital expenditures during the three months ending Sept. 30, with approximately three-quarters of that spending directed toward shorter-lived assets, primarily central processing units and graphics processing units used in data centers.

The spending figures illustrate the financial demands of competing in the AI industry, where technology companies are committing billions to specialized computer chips, electricity-intensive data centers and the infrastructure required to train and operate increasingly sophisticated AI models.

Hood said the company expects capital expenditures to exceed $50 billion during the quarter ending in December, bringing its projected calendar-year spending to approximately $170 billion. She also indicated that spending would accelerate during the second half of Microsoft’s fiscal year as delayed infrastructure capacity becomes available and the company continues purchasing processors, memory and storage equipment.