AI Fuels Record US Convertible Bond Sales

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📊Read original on Bloomberg Technology

💡AI boom drives record convertible bonds—vital financing trend for AI founders raising capital.

⚡ 30-Second TL;DR

What changed

AI-linked firms fueled record US convertible bond volume last year

Why it matters

Easier access to convertible bonds could accelerate AI startup growth by providing flexible financing amid high valuations. Founders benefit from investor enthusiasm for AI, potentially lowering funding costs.

What to do next

Evaluate convertible bond offerings from banks like Goldman Sachs for your AI startup's next funding round.

Who should care:Founders & Product Leaders

🧠 Deep Insight

Web-grounded analysis with 6 cited sources.

🔑 Key Takeaways

•AI-linked companies, including CoreWeave, drove US convertible bond issuance to a record global total of $167 billion in 2025, the highest in 24 years, with CoreWeave issuing $2.25 billion at a low 1.75% coupon in December[1].
•Major tech firms like Alphabet, Amazon, Meta, and Oracle issued $93 billion in US investment-grade bonds in 2025 for AI data centers, representing 6% of total issuance, with JPMorgan projecting $300 billion annually for the next five years[1].
•Convertible bonds offer AI firms cheaper financing due to equity conversion options, exemplified by xAI's $5 billion bonds/loans at 12.5% fixed rate and Bitdeer's proposed $300 million convertible senior notes due 2032 for data centers and AI expansion[1][4].

🛠️ Technical Deep Dive

Convertible bonds allow conversion into equity at a preset stock price, enabling lower coupons (e.g., CoreWeave's 1.75%) but risk dilution or refinancing if stock underperforms; settlement options include full physical (shares only), cash, or flex[1][5].

🔮 Future ImplicationsAI analysis grounded in cited sources

Surging AI-driven convertible bond issuance signals robust investor appetite for AI infrastructure financing, potentially leading to $300B+ annual debt deals and $30-40B data center securitizations in 2026-2027, though heavy capex may strain cash flows and raise dilution/debt concerns for issuers like Oracle[1][2][3][5].

⏳ Timeline

2025-12

CoreWeave issues $2.25B convertible bond at 1.75% coupon amid record AI-linked issuance

2025-09

Oracle completes $18B bond offering including 40-year maturities for AI buildout

2025

Global convertible bond issuance hits 24-year high of $167B driven by AI firms; Big Tech issues $93B investment-grade bonds

📎 Sources (6)

Factual claims are grounded in the sources below. Forward-looking analysis is AI-generated interpretation.

AI-linked companies drove US convertible bond issuance to a record high last year. This momentum is expected to continue into another banner year. The trend highlights surging investor appetite for AI firms.