US EditionAI Giants Turn to Massive Debt to Finance Tech Race
Meta raised $30 billion and Oracle $18 billion in bonds to finance AI and data centers amid a competitive tech race, benefiting from low borrowing costs, analysts say.
- Meta announced a $30 billion bond sale on Thursday to fund AI development, with repayment scheduled over decades.
- Meta formed a joint venture with Blue Owl Capital to raise $27 billion for datacenter construction, while Oracle raised $18 billion in bonds last month, reflecting a broader debt trend.
- Strong demand and asset-backed structures have made lenders comfortable as investor demand for Meta's bonds was four times greater than supply, with debt secured by data centers and GPUs.
- Shareholder concern pushed Meta's shares down more than 11% on Thursday, despite the company noting $18.6 billion in net income in its recently ended quarter before a one-time charge related to US President Donald Trump.
- Startups rely on equity as Byron Anderson warned `I learned in my profession that if a company is not making profits and they issue , that is a risky proposition`, since debt markets are less accessible to unprofitable AI firms.
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'Godfather of AI' says tech giants can't profit from their astronomical investments unless human labor is replaced
Computer scientist and Nobel laureate Geoffrey Hinton doubled down on his warnings about how artificial intelligence will affect the labor market and the role of companies leading the charge. In an interview with Bloomberg TV’s Wall Street Week on Friday, he said the obvious way to make money off AI investments, aside from charging fees to use chatbots, is to replace workers with something cheaper. Hinton, whose work has earned him a Nobel Prize…
The hidden debt behind the AI boom: How Meta and xAI are quietly raising billions to finance AI investments - Tech Startups
The race to dominate artificial intelligence is pushing tech giants into uncharted financial territory. Behind the scenes, a quiet revolution is reshaping how companies fund their massive AI ambitions. Instead of piling debt directly onto their books, firms like Meta […] The post The hidden debt behind the AI boom: How Meta and xAI are quietly raising billions to finance AI investments first appeared on Tech Startups.
Meta, xAI Starting Trend for Billions in Off-Balance Sheet Debt
Just this month, Meta Platforms Inc. has secured about $60 billion in capital to build data centers, part of its spending to get ahead in the artificial intelligence race. Half of that won’t show up on the social media giant’s balance sheet as debt.
Meta's decision to debt 30 billion to finance the growth of fireworks intelligence is a reaction.
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