After the new bond sale, Amazon is borrowing $17.5 billion from banks as it continues to spend on artificial intelligence

Companies are spending exorbitant amounts of money to keep up with the AI ​​arms race. Debts are rising. Amid this flurry of activity, Amazon signed a deal to borrow about $17.5 billion from a number of financial lenders, according to Bloomberg.

The banks behind the loan reportedly include Citigroup, JPMorgan Chase, Wells Fargo, HSBC and Bank of America Securities. The deal is described as a deferred-draw term loan, meaning Amazon can withdraw the funds on its own schedule rather than taking the full amount up front, giving it flexibility in how and when to distribute the funds.

The loan comes just two days after it was announced that Amazon would also raise $14 billion from the sale of Canadian bonds, bringing its total new financing to about $31.5 billion in about 48 hours.

It’s not clear exactly how Amazon plans to spend all the new money. Reuters notes that the new loan will be used for “general corporate purposes.” TechCrunch has reached out to Amazon for more information.

Amazon is not alone. To fund new AI infrastructure such as chips and data centers, companies are leveraging historical capital expenditures. Increasingly, companies are borrowing money to finance their massive AI builds. The question investors and analysts are increasingly asking is not whether such spending is necessary, but whether the returns will justify it at all.

The scale of borrowing is staggering even by Silicon Valley standards. About a week ago, Alphabet, Google’s parent company, said it planned to raise $80 billion through a stock sale designed to help “finance its investments in a balanced manner while maintaining a healthy balance sheet.” Meta also announced plans to raise $30 billion from a bond sale – the largest ever.