Hyperscalers Issue Record $240B in AI Bonds Amid FCF Collapse

According to Yonhap Infomax, hyperscale AI operators issued record bond offerings this week, with Amazon's $25 billion issuance marking the seventh instance of a $25+ billion single offering by tech firms in 2026. Amazon, Alphabet, Nvidia, Meta, and Oracle's combined bond issuances account for over half of all U.S. bond supply growth this year and 15% of total bond issuance as of May. Hyperscalers are projected to issue $240 billion in bonds this year, up 9-fold compared to the 2015-2024 average.

However, major operators face structural risks. Amazon's free cash flow plummeted 95% from $26 billion to $1.2 billion, while Alphabet and Microsoft saw 38% and 22% declines respectively. Oracle already reports negative FCF. Yet these firms issued bonds with 5.0-5.7% coupons and 10-30 year maturities, while AI service revenue depreciates on 18-24 month cycles. Credit default swap premiums surged 6-fold year-over-year, and bond spreads widened sharply—Amazon's 2036-maturity debt jumped from 61 basis points to 73 basis points in a single day.