Microsoft wants to raise $25 billion for huge AI investments

Microsoft wants to raise at least $25 billion by issuing bonds. It is the first time in more than nine years that the company has borrowed money in this way in the United States. The proceeds can be used, among other things, for investments in artificial intelligence.

Big tech companies are borrowing record amounts this year, but investors are starting to worry more and more about costs.

According to Bloomberg, Microsoft is preparing a bond sale with maturities of 2 to 40 years. The loans may be divided into ten different groups. The final amount is not yet fixed and depends on how much interest there is.

The last time Microsoft issued US bonds was in 2017. Then the company raised $17 billion.

Microsoft has an advantage over many other tech companies. It has the highest credit rating, AAA, from both Moody's and S&P. Only Johnson & Johnson, as another publicly traded American company, has the same scores from both credit rating agencies.

As a result, investors run relatively little risk that Microsoft will not be able to repay its debts. At the same time, according to asset manager Brett Kozlowski of GW&K Investment Management, the longest-dated bonds can yield more than six percent interest.

The loan with the longest maturity must be repaid in 2066. Microsoft would offer an interest rate that is up to 1.35 percentage points above that of comparable US government bonds.

Microsoft is the next big name to raise money for its investments. Google's parent company Alphabet already sold $25 billion in bonds in August.

According to Bloomberg, major technology companies and data center developers have borrowed more than $313 billion globally this year through high credit-worthiness bonds. That is almost three times as much as in the whole of 2025.

The billions will go to new data centers, chips and other infrastructure needed to develop and run AI systems, among other things.

Initially, investors lined up to lend money to these companies. Meanwhile, they are looking more critically at the huge expenses. Some investors want to receive a higher interest rate, because it is still uncertain when the investments will yield sufficient profit.

The increased market interest rate also makes borrowing more expensive. Nevertheless, the demand for bonds from financially strong companies remains high.

How investors view the debts of tech companies can be seen in the costs of insurance against default. This allows investors to protect themselves if a company fails to repay its debts.

For Microsoft, that price is currently around 54 basis points. At Meta, the parent company of Facebook, that's about 116 basis points. Oracle is a lot higher at around 275 basis points.

This difference shows that investors consider Microsoft's debts to be less risky.

Microsoft also presented strong quarterly figures on Wednesday. Cloud services revenue increased by 48 percent, while capital expenditures remained within expectations.

Finance Director Amy Hood said after the release that Microsoft wants to raise additional money when conditions are favorable.

The bond sale is supervised by Wells Fargo, JPMorgan and UBS. The money is intended for general business expenses, including investments. Microsoft has not yet confirmed the plans itself.