Microsoft is issuing $25 billion across 10 bond tranches maturing between 2028 and 2066 to expand its data centers, servers, and AI infrastructure. The debt offering drew about $115 billion in orders, backed by the company's rare AAA credit rating shared only with Johnson & Johnson. Simultaneously, a voluntary buyout offer was presented to nearly 60,000 workers across four countries, though management expects 3,000 or fewer staff members to participate.
Key points
Capital raised from the offering will directly fund expanding cloud and artificial intell…: Capital raised from the offering will directly fund expanding cloud and artificial intelligence infrastructure.
Microsoft anticipates its capital expenditures will reach approximately $175 billion for…: Microsoft anticipates its capital expenditures will reach approximately $175 billion for the year 2026.
The company maintains top-tier AAA credit ratings from both Moody's and S&P to support it…: The company maintains top-tier AAA credit ratings from both Moody's and S&P to support its debt strategy.
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The bond sale is Microsoft's first US investment-grade debt offering since 2017. It also comes at a time when major technology companies are raising billions of dollars to finance their AI infrastructure expansion. However, the borrowing and employee buyout programmes are separate corporate decisions. Microsoft has described the exit offer as voluntary and expects only a small percentage of eligible employees to accept it.
Why is Microsoft borrowing $25 billion?
The growing cost of building and operating AI infrastructure is a major factor behind Microsoft's latest fundraising. The company needs substantial computing capacity to support its expanding portfolio of AI products and cloud services. This requires investments in data centres, servers and other infrastructure. Microsoft has forecast capital expenditure of around $175 billion for 2026. Raising money through bonds gives the company access to long-term funding while allowing it to finance its investment plans through debt markets.Microsoft Chief Financial Officer Amy Hood had indicated during the earnings call that the company had not yet tapped debt markets despite having access to them because of its strong credit ratings. The notes…
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