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Nvidia plans $25B bond sale, its first in five years
The chipmaker's massive debt offering drew $85 billion in early orders as tech giants race to fund AI infrastructure
Nvidia is heading back to the bond market for the first time since 2021, and it’s not being subtle about it. The company is looking to raise up to $25 billion in investment-grade debt, a figure that dwarfs its previous outing by a factor of five.
The deal structure
The offering will be split across seven tranches with maturities stretching from 2 to 30 years. The longest-dated notes are expected to price at roughly 90 basis points over Treasuries.
Goldman Sachs, JPMorgan, and Morgan Stanley are running the books.
The proceeds are earmarked for general corporate purposes, including refinancing existing notes. Nvidia has a 3.2% coupon issue maturing in September 2026 that’s likely on the list.
Early order books reportedly topped $85 billion, meaning investors showed up with more than three times the amount Nvidia is actually looking to borrow.
Nvidia’s credit default swaps now trade near or below levels associated with US sovereign debt.
From $5 billion to $25 billion
The last time Nvidia tapped the bond market was June 2021, when it raised $5 billion. The company has historically maintained a conservative balance sheet, funding operations through the enormous cash flows generated by its AI accelerator business.
Nvidia isn’t alone in this strategy. Meta and Salesforce have both ramped up bond issuances recently as part of what analysts are calling an AI debt boom. AI infrastructure, specifically data centers packed with GPU clusters, requires massive upfront capital expenditure.
What this means for investors
When $85 billion in orders materialize for a $25 billion offering, it reflects deep institutional confidence in Nvidia’s creditworthiness. Bond investors are famously more conservative than equity investors.
Given the 90-basis-point spread on the longest tranche, Nvidia is locking in relatively cheap financing for projects expected to generate returns above its borrowing costs.
If the AI spending cycle decelerates faster than expected, or if cloud providers start pulling back on GPU orders, Nvidia would be servicing a $25 billion obligation against potentially shrinking revenues.