Meta to sell $30B in bonds to build AI datacenters
- Reference: 1761917337
- News link: https://www.theregister.co.uk/2025/10/31/meta_launches_30_billion_bond/
- Source link:
The social media giant — owner of Facebook, WhatsApp and Instagram — launched the bond sale in [1]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.
OpenAI tells Trump to build more power plants or China wins the AI arms race [2]READ MORE
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.
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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, [4]the figure was $39.23 billion .
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As well as issuing bonds, [7]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.
[8]AI is making Google and Meta even stronger and richer
[9]Meta will move React to Linux Foundation to address vendor dominance fears
[10]Meta convinces Blue Owl to cut $30B check for its Hyperion AI super cluster
[11]Meta will listen into AI conversations to personalize ads
This week has seen [12]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.
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Credit traders are now [14]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, [15]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. ®
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[1] https://www.sec.gov/Archives/edgar/data/1326801/000119312525258837/d61769dfwp.htm
[2] https://www.theregister.com/2025/10/28/openai_100gw_power_demand/
[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2aQTrJVPaq_zTlTfekcxsWwAAAAM&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[4] https://investor.atmeta.com/investor-news/press-release-details/2025/Meta-Reports-Fourth-Quarter-and-Full-Year-2024-Results/
[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44aQTrJVPaq_zTlTfekcxsWwAAAAM&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[6] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33aQTrJVPaq_zTlTfekcxsWwAAAAM&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[7] https://investor.atmeta.com/investor-news/press-release-details/2025/Meta-Announces-Joint-Venture-with-Funds-Managed-by-Blue-Owl-Capital-to-Develop-Hyperion-Data-Center/default.aspx
[8] https://www.theregister.com/2025/10/30/meta_alphabet_q3_2025/
[9] https://www.theregister.com/2025/10/09/meta_react_foundation/
[10] https://www.theregister.com/2025/10/17/meta_blue_owl_hyperion/
[11] https://www.theregister.com/2025/10/01/meta_ai_use_informs_ads/
[12] https://www.theregister.com/2025/10/30/alphabet_capex/
[13] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44aQTrJVPaq_zTlTfekcxsWwAAAAM&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[14] https://www.investing.com/news/stock-market-news/oracles-credit-default-swaps-rise-as-ai-investments-grow-93CH-4316658
[15] https://www.theregister.com/2025/09/24/bain_ai_costs/
[16] https://whitepapers.theregister.com/
Re: Repayment duration
I buy some 20 year bonds and could be dead before they redeem. But then again, maybe not. I tend towards the tax exempt ones, and really they are paying a much higher effective yield than these. And those TE ones have a people backing them be it a city, state, or school. I would not touch these Meta ones with a ten foot pole. Bond sales are usually the last step in the tits up process.
Re: Repayment duration
When even the FT are questioning when the AI bubble will burst (31/10 Alphaville column for those interested) it would seem that doom is upon those throwing money at such things.
Having said that, very few to none of the buyers of these bonds will expect to keep them to maturity, they're just working on the basis that they can get a good price when they sell them on.
Re: Repayment duration
Having said that, very few to none of the buyers of these bonds will expect to keep them to maturity, they're just working on the basis that they can get a good price when they sell them on.
The musical chairs typical of a bubble ?
The tempo characteristically rises to a tarantella before the bubble bursts.
Toby Nangle " ..., things are starting to look maybe a little pricey. "
I would have gone with "dicey." ;)
Re: Repayment duration
"The musical chairs typical of a bubble ?"
Yes and no. The very fact that these are being touted as such big numbers for a specific purpose over a long term says (along with other indicators) that we're in bubble territory. But expectations of secondary trading of the bonds is entirely normal. Very few people or businesses buy long term bonds to hold until maturity. They're usually buying bonds because it diversifies their investment portfolio, and if they are doing that a mix of maturities also makes sense. If not being held to maturity then the buyer is reliant upon a secondary bond market. The value of a bond when on secondary markets isn't simply the NPV of the bonds interest and capital repayment, it's affected by changes in interest rates, whether equities are going up or down, changes in credit quality of the issuer, whether the bond is secured on assets and so on.
Re: Repayment duration
True you can sell bonds in the secondary fairly easily, and the fact this is such a large offering will help that. But, unlike stocks, not nearly as liquid. If the bottom falls, you can do a limit price on your stock to get out with usually around the limit as the loss. They aren't called stop-loss for nothing. Bonds on the other hand not an option. You'd have to see it coming, and even then, may not find a buyer. I do plan to hold my bonds though, that tax exempt thing is gold. I've got some long term treasuries too, those I may sell. Rates going down might tempt me. They are over par now. If rates drop to 3-ish, that could be quite tempting.
Just give me the digital burger.
(dang it, why isn't there a burger icon.)
the rising trade in credit default swaps ...
has the very definite odour of 2007-8.
Easy to forget the next cab off the rank after " too big to fail " is " too big to rescue. "
Repayment duration
I'm not sure whether I would be more worried about Meta not being around in 40 years to pay off their debts, or more worried that they would be.