Meta to sell $30B in bonds to build AI datacenters

Zuckcorp will gladly pay you in 2065 for the eyewatering sums it is borrowing today

Even the world's richest companies need outside help to fulfill their datacenter dreams. Now, Meta is selling $30 billion in bonds to build out its infrastructure estate and support its ambition in AI markets. Some of these won't mature for 40 years.

The social media giant — owner of Facebook, WhatsApp and Instagram — launched the bond sale in an SEC filing last night with the help of banks Citigroup and Morgan Stanley. It comes as major cloud and infrastructure vendors announce ballooning capital investment plans to keep pace in the race for AI datacenter capacity.

The Meta bonds were issued in six parts with varying interest rates and maturity between 2030 and 2065.

Earlier this week, Meta posted $51.2 billion in revenue for its calendar Q3, up 26 percent year-on-year. Susan Li, Chief Financial Officer, told investors that its quarterly capital expenditure was at $19.4 billion, “driven by investments in servers, data centers and network infrastructure”.

“Our primary focus is deploying capital to support the company's highest order priorities including developing leading AI products, models, and business solutions. As we make significant investments in infrastructure to support this work, we are focused on preserving maximum long-term flexibility to ensure we can meet our future capacity needs while also being able to respond to how the market develops in the years ahead,” she said.

Li noted that Meta currently expects 2025 capital expenditures to be in the range of $70 billion to $72 billion, increased from its prior outlook of $66 billion to $72 billion. In 2024, the figure was $39.23 billion.

As well as issuing bonds, Meta has entered a joint venture with Blue Owl Capital to fund its datacenter building.

The fund will own an 80 percent interest while Meta will retain the remaining 20 percent ownership of the JV which is set to spend $27 billion on buildings, power, cooling, and connectivity for the Hyperion datacenter campus. A portion of capital raised will be funded by debt issued through a private securities offering.

This week has seen an escalation in the datacenter arms race that cloud and AI companies say is necessary to stake their claim to the future of AI. Google’s capital expenditure is set to triple in two years to hit $93 billion in 2025; in 2023, it stood at $32.25 billion. Microsoft’s spending for the most recent quarter will be $34.9 billion, up from $24 billion the previous quarter. Amy Hood, Microsoft executive veep and CFO, said growth in capital expenditure would be higher next year.

Oracle is also getting in on the act. Estimates suggest it will need to borrow $100 billion over four years to fulfill the demand of its $300 billion cloud compute contract with OpenAI. It has already launched an $18 billion bond sale and reports suggest it plans another $38 billion debt offering.

Credit traders are now purchasing protection against Oracle defaulting on its borrowing, according to reports. Data from ICE Data Services said the cost of such insurance — in the form of credit default swaps — over the next five years is near its highest level since October 2023.

Last month, management consultancy Bain & Company said the industry would need to spend $500 billion per annum on building datacenters to create the extra 100 gigawatts of capacity in the US needed by 2030 to meet demand for AI. ®