Meta raises $25 billion in bond sale after lifting AI spending plan
Tweet
Share
E-mail
People walk behind a logo of Meta Platforms company, during a conference in Mumbai, India, September 20, 2023. REUTERS/Francis Mascarenhas
April 30 (Reuters) - Meta Platforms sold investment-grade bonds worth $25 billion in six portions, according to a regulatory filing on Thursday, as the social media giant ramps up investments in artificial intelligence infrastructure.
The news follows a $30 billion bond sale last year that was Meta's biggest ever. Like its Big Tech rivals, Meta is increasingly tapping debt to fund its AI ambitions after years of relying on strong cash flows to fund expansion into new technologies.
A day earlier, Meta had raised its 2026 capital expenditure forecast by $10 billion to a range of $125 billion to $145 billion. Overall, Big Tech is now expected to spend more than $700 billion on AI infrastructure this year.
But the companies' growing appetite for debt has worried analysts and experts who have warned about a growing number of circular deals in the AI industry.
Bloomberg News first reported the capital-raising plans earlier on Thursday.
Rating agency S&P Global rated Meta's new debt investment-grade and maintained its stable outlook for the company’s ratings.
S&P analysts said they expect Meta's leverage will remain "well below" the downgrade threshold for at least two years, but its massive investment in AI was "starting to affect credit metrics."
To help fund its spending push, Meta has scaled back its money-losing metaverse business. Reuters was the first to report that Meta is planning to lay off 20% or more of its workforce, with the first round of cuts, affecting half that number, set for May 20.
(Reporting by Harshita Mary Varghese in Bengaluru and Matt Tracy in Washington, additional reporting by Arasu Kannagi Basil; Editing by Shilpi Majumdar and Sahal Muhammed)
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Russian missile attack kills 10 in Ukraine's Kharkiv region, officials say
- At a Gaza zoo, war takes its toll on the animals
- Glencore’s planned Australian debut draws interest as investors look past coal
Create E-mail Alert Related Categories
ReutersSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
