The massive infrastructure demands of the artificial intelligence boom are reshaping Wall Street. Corporate America is tapping into the convertible bond market at a record-breaking pace, driven by AI-linked companies hungry for cash to build out data centers, secure energy, and expand cloud capacity.

In the first four months of 2026, U.S. convertible bond issuance skyrocketed to $34 billion—more than double the amount raised during the same period last year. This explosive start puts the market on track to easily shatter last year’s record of $120 billion, with roughly half of all new deals tied directly to AI, News.Az reports, citing Reuters.

Major tech players are leading the charge. Oracle recently locked in a massive $5 billion raise, cloud infrastructure firm CoreWeave secured $4 billion, and data center operator IREN Limited brought in $2.6 billion. Even chipmakers like On Semiconductor ($1.3 billion) and power companies like NextEra Energy ($2.3 billion) are getting in on the action.

What makes these bonds the hottest ticket in finance right now? It comes down to a clever mathematical compromise in a high-interest-rate environment.

How a convertible bond works: It acts like a traditional bond by paying regular interest, but it gives investors the right to exchange that debt for company stock if the share price hits a specific target.

Because investors get a lucrative "call option" on the company's future stock growth, tech firms can borrow money at incredibly low rates. In a jaw-dropping example, healthcare AI firm Tempus AI recently raised $400 million through a six-year convertible bond with zero interest and zero principal increase. Investors accepted the terms purely for the chance to flip the debt into stock if the shares climb 40% over the next few years.

For AI companies, it is the ultimate financial escape hatch. It allows them to avoid expensive traditional bank loans while bypassing standard stock offerings that dilute existing shareholders.

The intense investor appetite is even opening doors for newer, riskier startups. AI data center company WhiteFiber, which only went public last summer and has yet to turn a profit, easily raised $230 million in January to fund its expansions.

As hedge funds and asset managers clamor for any piece of the AI pie, tech companies are realizing that convertible debt is currently the cheapest money on the market—and they are capitalizing on it before the window closes.

News.Az 

By Aysel Mammadzada