Amazon Sets Up Up To $80 Billion In Secured Borrowing To Pay For AI Hardware
The new loan facility arrives as trailing-twelve-month free cash flow turned to a $42.4 billion outflow.
Amazon's quarterly report shows a new secured loan facility of up to approximately $80.0 billion, which the company can tap from the first quarter of 2027 through the third quarter of 2028 to buy technology infrastructure. The 10-Q, filed Friday, lands as spending on property and equipment pushed free cash flow to a $42.4 billion outflow over the past twelve months.
How the $80 billion facility works
Borrowing is at Amazon's discretion and varies with the timing and pricing of purchase orders. The loans carry variable interest rates, and each borrowing matures five years after it is drawn.
Amazon will pledge a security interest in certain of the purchased assets. Balances will appear as long-term debt, and repayments will show up in the cash-flow statement as repayments of long-term debt. The prior quarter's 10-Q carried no such facility.
It joins a year of heavy borrowing. Long-term debt stood at $173.125 billion on September 30, against $128.894 billion at June 30 and $65.648 billion at the end of 2025. Amazon drew a $17.5 billion term loan in September, and in October it replaced both of its revolving credit lines, a $5.0 billion 364-day facility and a $15.0 billion facility.
Cash burn behind the borrowing
Operating cash flow rose 29% to $168.3 billion for the trailing twelve months, Amazon said in its earnings release. Free cash flow, which subtracts net purchases of property and equipment, swung to an outflow of $42.4 billion from an inflow of $14.8 billion a year earlier. Amazon attributed the shift to a $94.8 billion year-over-year jump in those purchases, mainly artificial intelligence investment.
Cash capital spending was $75.9 billion in the third quarter and $172.2 billion for the first nine months. Amazon still expects about $220 billion for 2026, and the 10-Q adds that it expects the figure to "meaningfully increase in 2027," mostly on technology infrastructure.
Total contractual commitments reached $883.6 billion at September 30, up from $650.0 billion at June 30.
AI stakes on the balance sheet
Amazon, which sells products through its online and physical stores and runs Amazon Web Services, funded the last $21.3 billion of its commitment to OpenAI in the third quarter, bringing its Series C preferred stock investment to $50.0 billion. Its Anthropic nonvoting preferred stock was carried at about $92.5 billion, up from about $14.8 billion at year-end 2025.
On the operating side, AWS sales rose 39% to $46.0 billion in the quarter, and operating income reached $28.1 billion. Fourth-quarter guidance calls for operating income of $28.5 billion to $33.5 billion.
Amazon's guidance assumes about $220 billion of cash capital spending in 2026, and management says 2027 will be meaningfully higher.
Sources
- 10-Q Filing — Amazon (AMZN) — SEC EDGAR
- 10-Q Filing — Amazon (AMZN), Q2 FY2026 filed 2026-07-31 (comparison basis) — SEC EDGAR
- Earnings release (8-K Item 2.02, amzn-20260930xex991.htm) — Amazon, filed 2026-10-29 — SEC EDGAR
- Amazon sinks as AI spending eclipses strong cloud growth — rte.ie
- Amazon (AMZN) Q3 earnings report 2026 — CNBC
- Amazon misses Wall Street targets, offers cautious Q4 outlook as shares slide | AP News — Associated Press
- Amazon Slides on Light Fourth-Quarter Sales Estimates, Cash Burn — Reuters
- AWS Q3 earnings report 2026 — CNBC
