Microsoft prices $25 billion bond offering amid AI infrastructure buildout

Microsoft is adding a major source of financing as it builds infrastructure to meet AI demand. On October 29, 2026, it priced a $25 billion bond offering, with closing expected November 4. The proceeds are intended for general corporate purposes, leaving capital spending among several possible uses rather than earmarking the money for AI.

Another funding source beside cash flow and leases

The financing comes against a large spending target. Microsoft is aiming for $170 billion in capital expenditures in 2026 as it expands infrastructure for customers including Anthropic and OpenAI, according to CNBC.

Finance chief Amy Hood had outlined the approach on the company’s earnings call a day earlier. She said Microsoft would supplement its own cash generation with other funding sources when conditions were attractive. Leasing was already one of those sources; debt markets offered another route.

Microsoft holds S&P’s top-tier AAA credit rating, CNBC reported. It also reported positive free cash flow on October 28. The bond sale therefore adds financing alongside cash the business generates, rather than following a reported turn to negative free cash flow.

Proceeds leave management room to choose

Microsoft’s stated uses extend well beyond construction and equipment. The company said net proceeds may fund working capital, capital expenditures, stock repurchases, acquisitions and repayment of existing debt. Those categories leave management flexibility over where the money goes after the offering closes.

Repayment dates stretch from 2028 to 2066

The offering consists of senior unsecured notes split into ten portions, or tranches. Two carry floating interest rates: $1 billion due November 3, 2028, and $1 billion due November 3, 2029. The other eight carry fixed rates, with repayment dates ranging across nearly four decades.

Microsoft listed the fixed-rate portions as follows. Each matures on November 3 of the stated year:

• $2 billion at 4.85%, due in 2028.
• $3.25 billion at 5.00%, due in 2029.
• $3.25 billion at 5.20%, due in 2031.
• $2.5 billion at 5.35%, due in 2033.
• $4 billion at 5.55%, due in 2036.
• $2 billion at 6.15%, due in 2046.
• $4 billion at 6.25%, due in 2056.
• $2 billion at 6.35%, due in 2066.

The largest individual portions are the $4 billion notes due in 2036 and 2056. The final maturity is in 2066, at the highest fixed rate listed in the offering. That structure spreads repayment dates rather than putting the full principal on a single deadline.

J.P. Morgan Securities, UBS Securities and Wells Fargo Securities are among the joint book-running managers handling the offering. Microsoft has announced pricing; the expected November 4 closing remains the next step in completing the transaction.