Nvidia to Raise $20 Billion in First Debt Sale Since AI Boom

Nvidia is preparing to raise at least $20 billion through a debt offering, marking the chipmaker's first bond sale since artificial intelligence demand transformed it into one of the world's most valuable companies, according to sources familiar with the plans.

The company filed paperwork with the SEC on Monday disclosing the capital raise but did not specify the amount. Sources indicated the final figure could approach $25 billion, matching a commercial paper program Nvidia outlined earlier this year. The chipmaker's stock climbed 3.5% following the announcement.

Why it matters

Nvidia's debt raise reflects a broader pattern among AI-focused technology companies aggressively tapping capital markets despite strong cash generation. The move comes as the company simultaneously pursues an $80 billion share repurchase program, signaling management's confidence in sustaining growth while returning substantial capital to shareholders. The financing activity across the sector suggests these firms are positioning for continued heavy infrastructure investment even as they generate record profits.

Part of broader tech capital raise wave

Nvidia joins several technology companies recently accessing debt and equity markets. Alphabet announced plans this month to raise $85 billion in equity-related offerings after securing more than $55 billion in debt since November. Amazon raised approximately $54 billion in U.S. and European bond sales earlier this year and announced plans last week for a $10 billion Canadian debt offering. Super Micro disclosed $7 billion in equity-related financing last week to cover hardware component purchases.

Nvidia's debt profile and growth trajectory

The company currently carries about $7.5 billion in long-term debt and $1 billion in short-term debt. Its last debt raise in 2021 brought in $5 billion with notes maturing through 2031. At that time, Nvidia was generating approximately $27 billion in annual revenue for fiscal 2022. By fiscal 2026, sales had surged to $216 billion.

The launch of OpenAI's ChatGPT in late 2022 accelerated Nvidia's growth as AI model developers and cloud infrastructure providers rushed to acquire the company's graphics processing units. Nvidia generated $49 billion in free cash flow in its most recent quarter, up from $35 billion in the year-earlier period.

Capital allocation strategy

A company spokesperson said proceeds will fund general corporate purposes, including repayment and refinancing of existing debt. In May, Nvidia announced an aggressive capital return program, raising its dividend from one cent per share to 25 cents and authorizing $80 billion in share repurchases. Management has stated plans to return roughly 50% of free cash flow to shareholders this year.

These details were first reported by CNBC.