Technology
Why Big Tech Is Borrowing Billions to Fund AI Spending
Key Points
How Big Tech’s AI Race Fueled a Borrowing Boom For the past few years, the largest US technology companies have been in a costly race to develop advanced artificial intelligence systems while at the same time providing computing power to a burgeoning field of startups. To chase these goals, they have radically changed how they finance their growth. Long reliant on rich revenues and share price increases, Alphabet Inc.’s Google, Meta Platforms Inc. and other tech giants now are borrowing...
How Big Tech’s AI Race Fueled a Borrowing Boom
For the past few years, the largest US technology companies have been in a costly race to develop advanced artificial intelligence systems while at the same time providing computing power to a burgeoning field of startups. To chase these goals, they have radically changed how they finance their growth. Long reliant on rich revenues and share price increases, Alphabet Inc.’s Google, Meta Platforms Inc. and other tech giants now are borrowing heavily to build the technology that makes chatbots run.
One of the latest potential deals involves Elon Musk’s SpaceX, which increasingly has focused on the AI segments of its business. In early October, Bloomberg News reported that SpaceX, which owns xAI, operator of the Grok chatbot and the social platform X, was in talks with banks and investors to borrow $40 billion to buy chips from Nvidia Corp. News of the discussions came days after Bloomberg reported that financial firms organized by Broadcom Inc. were seeking to bring together $60 billion in financing for AI chips for Anthropic PBC, maker of the Claude AI assistant, and other companies.