Amazon added an $80bn financing facility as AI spending pushed free cash flow below zero

Amazon has arranged a financing facility under which it can borrow as much as $80bn to purchase technology-infrastructure assets between early 2027 and the third quarter of 2028. Each borrowing matures five years after it is drawn. The company did not identify the lenders, the assets or the interest rate, but said the amounts will count as long-term debt. Amazon already had $173.1bn of long-term obligations at the end of September, up from $65.6bn a year earlier.

The facility arrives as a profitable operating business becomes cash-negative after investment. AWS revenue grew 39% and reached a $184bn annual run rate, while Amazon reiterated roughly $220bn of cash capital expenditure for 2026. Yet trailing-12-month free cash flow fell from a $14.8bn inflow to a $42.4bn outflow, driven mainly by a $94.8bn year-on-year increase in purchases of property and equipment. Management argues that demand and future growth justify the construction; the financing shows that current cash receipts no longer cover its pace.

Across Amazon, Alphabet, Meta and Microsoft, quarterly capital spending rose from $113bn to $207bn in a year. The Financial Times calculates that Google, Meta and Amazon moved from producing $36.4bn of free cash flow in last year's third quarter to burning $45.2bn this year. Public markets erased almost $900bn from the four companies after the results.

Supplier financing does not imply distress. It matches debt maturities to equipment that should produce revenue for years and can preserve cash for the rest of the business. The important change is in who must now believe the forecast. Chip suppliers, banks and bondholders are underwriting demand that was previously financed from the platforms' own surplus. If utilisation, prices or construction schedules disappoint, the AI investment cycle will transmit the shortfall beyond Big Tech's shareholders.