Meta to Raise $25 Billion in Bonds to Cover AI Spending Gap

Meta Platforms is preparing to tap the bond market on Tuesday to fund a steep rise in artificial intelligence costs. The company aims to raise between $20 billion and $25 billion through a new debt offering.

Sources familiar with the transaction said the sale will be split between two currencies. Two-thirds of the proceeds will be denominated in U.S. dollars, while the remaining one-third will be issued in euros. Final pricing for the bonds is expected to be set by Tuesday afternoon.

This move follows a recent change in the company's credit profile. S&P Global Ratings cut Meta's outlook from stable to negative just days ago. The agency kept the long-term rating at AA- but cited uncertainty over high capital spending and negative cash flow. Meta has not yet commented on the specific terms of the new sale.

The company’s financial reports show a major increase in planned spending. Meta disclosed last month that full-year capital expenditure will now fall between $135 billion and $145 billion. This represents a $5 billion increase at the low end compared to previous guidance. The funds are earmarked for data centers and computing power needed for AI training and inference.

The strain on cash flow is visible in the latest quarterly results. Meta reported negative free cash flow of $2.12 billion for the most recent quarter. This places the company in the same category as Alphabet and Amazon, which have also seen free cash flow turn negative due to heavy infrastructure investment.

Meta has been accessing capital markets aggressively this year. The company raised $25 billion through a bond sale in April. Last week, it announced a plan to raise a total of $95 billion to support its AI ambitions. That total includes $35 billion from underwritten public equity offerings and $60 billion through an at-the-market stock program.

The new debt issuance comes during a period of volatility for Meta shares. The stock fell in 12 of the 14 trading sessions prior to October. October was the company's worst monthly performance in four years. Investors have expressed concern about the pace of spending and the timeline for returns on these investments.

Despite the recent decline, Meta stock rose 2.7 percent on Tuesday following news of the debt offering. Market participants are watching how the company manages its balance sheet while expanding its AI portfolio. The split currency issuance allows Meta to align its liabilities with its global operational costs and revenue streams.

The company’s financial decisions will remain under close scrutiny as it scales its AI operations. Investors will look for signs that increased spending begins to yield tangible results in user engagement and advertising performance. The balance between aggressive investment and financial stability will shape how the market perceives its long-term value.