Nvidia Turns to Bond Market for First Major Debt Raise Since ChatGPT Ignited AI Gold Rush

Nvidia is preparing to sell at least $20 billion in bonds, marking the chipmaker's first significant debt offering since the artificial intelligence boom reshaped the tech industry. Sources familiar with the plan say the final amount could reach $25 billion, depending on market conditions.

The company disclosed the capital raise in a Monday SEC filing but did not specify the target. Earlier this year, Nvidia had authorized up to $25 billion in unsecured commercial paper. The proceeds will go toward general corporate purposes, including refinancing existing debt, according to a company spokesperson.

Nvidia shares rose 3.5% on Monday and are up roughly 14% year-to-date. The move follows a pattern among AI-linked tech giants tapping bond markets for growth and operations. Alphabet raised $85 billion in equity-related offerings this month after securing over $55 billion in debt since November. Amazon issued about $54 billion in U.S. and European bonds earlier this year, plus a planned $10 billion Canadian debt sale. Super Micro recently announced $7 billion in equity-linked financing for hardware purchases.

Nvidia currently carries $7.5 billion in long-term debt and $1 billion in short-term debt. Its last bond sale, in 2021, raised $5 billion - back when the company's annual revenue was roughly $27 billion, compared with $216 billion in fiscal 2026. The launch of OpenAI's ChatGPT in late 2022 triggered a surge in demand for Nvidia's graphics processors from AI model builders and hyperscale cloud providers.

Despite the debt plans, Nvidia remains cash-rich. It generated $49 billion in free cash flow last quarter, up from $35 billion a year earlier. In May, the company raised its dividend to 25 cents per share and authorized $80 billion in share buybacks, pledging to return about half of free cash flow to shareholders this year.

Source: CNBC