Nvidia joins AI debt boom with bond sale targeting $20 billion
Nvidia Corp. plans to sell at least $20 billion in bonds to fund AI investments, marking its first debt sale in five years and the largest offering in its history. The proceeds will support strategic partnerships, including a $30 billion contribution to OpenAI’s funding round, while refinancing existing debt at a yield around 0.9% above Treasuries.
Nvidia Corp. is set to issue at least $20 billion in bonds on Monday, joining a surge of companies borrowing heavily to finance AI expansion. The offering, which could grow larger, includes seven debt tranches with maturities from two to 30 years, with the longest-term notes priced at roughly 0.9% above U.S. Treasury yields. This marks Nvidia’s first bond sale in five years and its largest ever, exceeding its prior offerings in 2020 and 2021 by fourfold. The proceeds will refinance outstanding debt and fund strategic AI initiatives, including a $30 billion contribution to OpenAI’s funding round and investments in Anthropic PBC and Intel Corp. Nvidia’s AI-driven revenue has generated over $200 billion in projected free cash flow for the fiscal year ending January 31, according to analyst estimates. The bond sale reflects broader trends in Big Tech, where companies like Alphabet Inc. and Amazon.com Inc. have issued hundreds of billions in debt to build AI infrastructure. Nvidia’s move aligns with its role as a key supplier in the AI ecosystem, supporting demand for its chips while maintaining its AA credit rating. JPMorgan Chase & Co., Morgan Stanley, and Goldman Sachs Group Inc. are managing the offering, though representatives declined to comment. Analysts suggest the debt sale will lower Nvidia’s cost of capital, reinforcing its ability to fund high-stakes AI partnerships without compromising financial stability.
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