Microsoft has returned to the US investment-grade bond market for the first time in nearly a decade, and the demand was overwhelming.

The company priced **$25 billion in senior unsecured notes** on October 29, 2026, its first US high-grade debt offering since 2017 when it raised $17 billion . Investor orders reportedly exceeded $100 billion, more than four times the offering size .

The deal is expected to close on November 4, 2026 .

The Numbers That Matter

The offering was split into 10 tranches with maturities ranging from 2028 to 2066. Fixed rates start at 4.85% for the 2028 notes and climb to 6.35% for the 40-year notes due in 2066 .

Here is the breakdown of the largest tranches:

Two floating-rate tranches of $1 billion each are due in 2028 and 2029 .

Why Is Microsoft Borrowing When It Has $76.8 Billion in Cash?

This is the question that has dominated financial commentary since the sale was announced.

Microsoft reported $76.8 billion in cash, cash equivalents, and short-term investments as of June 30, 2026 . The company also remains one of only two US public companies with a AAA rating from both Moody’s and S&P, the other being Johnson & Johnson .

So why take on debt?

The answer is AI infrastructure. Microsoft’s projected capital expenditure for 2026 is approximately $175 billion, aimed at expanding data centers, servers, and AI infrastructure. Azure revenue grew 48% last quarter, and CFO Amy Hood said demand still exceeds supply .

The bond proceeds are officially earmarked for “general corporate purposes,” including capital expenditure, working capital, share repurchases, acquisitions, and repayment of existing debt . But the AI spending context is unmistakable. In its prospectus, Microsoft identifies building global-scale cloud and AI infrastructure as a core long-term ambition .

The Bigger Trend: Big Tech Is Borrowing Like Never Before

Microsoft is not alone. Hyperscalers and data center developers have raised over **$313 billion** through investment-grade bonds globally this year, nearly three times the 2025 total. Alphabet raised $25 billion in debt in August .

The shift marks a change in how Silicon Valley funds its ambitions. Traditionally, these companies relied on their massive cash piles. The AI spending race has changed that calculation. Building data centers requires enormous upfront investment in land, buildings, electricity infrastructure, servers, advanced processors, and networking equipment—costs that must be borne before revenue from AI services fully materializes .

What This Means for Investors

For Microsoft shareholders, the bond sale is not a sign of distress. It is a signal of scale. The company can borrow at AAA rates, lock in long-term financing, and preserve cash flexibility for acquisitions and shareholder returns.

The risk is not in the debt itself—$25 billion is manageable for a company generating Microsoft’s cash flows. The risk is in whether the AI infrastructure being built will generate sufficient returns to justify the spending. That question remains open across the entire tech sector, not just Microsoft.

The deal closes on November 4. Investors will be watching the company’s Ignite conference on November 17–20 for more clarity on the AI and cloud roadmap .

FAQ

Q1: How much is Microsoft raising through this bond sale?
Microsoft is raising $25 billion through senior unsecured notes, its first US investment-grade bond offering since 2017 .

**Q2: Why is Microsoft borrowing despite having $76.8 billion in cash?**
The company is funding massive AI and cloud infrastructure investments. Its projected 2026 capex is approximately $175 billion. Borrowing allows Microsoft to preserve cash flexibility for other priorities .

Q3: What are the interest rates on Microsoft’s bonds?
Fixed rates range from 4.85% for 2028 notes to 6.35% for notes maturing in 2066 .

Q4: When will the bond sale close?
The offering is expected to close on November 4, 2026 .