Nvidia Corp. has raised $25 billion through a high-grade bond offering, marking its largest debt sale since 2021 and joining a wave of major technology firms tapping debt markets to finance expansion in artificial intelligence (AI). The Santa Clara-based chipmaker’s offering, priced Monday, drew around $85 billion in investor demand—more than three times the size of the bonds issued—prompting Nvidia to increase the target from an initial $20 billion.

The company sold notes in seven maturities ranging from two to 30 years, with yields on the longest bonds tightening by a quarter percentage point to 0.65 percentage points above comparable U.S. Treasuries, reflecting robust investor appetite. Proceeds from the deal will be used for refinancing existing debt and other corporate purposes.

Nvidia’s move follows similar jumbo bond issuances by tech giants including Alphabet Inc. and Amazon.com Inc., as the sector seeks capital to build data centers and infrastructure crucial to accelerating AI development. Nvidia, a key supplier within the AI ecosystem and currently the world’s most valuable company, has been heavily investing in firms that complement its AI strategy. This includes a $5 billion stake in Intel Corp., up to $10 billion toward Anthropic, a maker of AI models, and a $30 billion contribution to a large funding round for OpenAI.

The surge in AI-driven demand has propelled Nvidia’s profitability, with analyst estimates projecting the company to generate more than $200 billion in free cash flow for its fiscal year ending January 31. The bond offering was conducted without the typical investor roadshows usually held in advance of such sales, which analysts attributed to Nvidia’s dominant market position and strong financial profile.

“I’m not surprised they would do a drive-by,” said Andy Li, an analyst at CreditSights Inc., highlighting Nvidia’s ability to attract investor interest without extensive marketing. Nvidia’s strong credit ratings and status as a relatively infrequent bond issuer made the notes particularly appealing amid a low-risk environment for investment-grade debt.

The timing of Nvidia’s offering also coincides with improving conditions in credit markets, supported by easing geopolitical tensions following an agreement between the U.S. and Iran that ended their conflict. This development helped spark a rally in the bond market, driving investment-grade risk measures to their lowest levels since early February and spurring consistent inflows into high-grade bond funds for 13 consecutive months.

Market observers note that this relatively low-cost, long-dated debt issuance could allow Nvidia to reduce its average cost of capital while maintaining its AA credit rating. The capital raised will support Nvidia’s ongoing strategic partnerships in AI, including its relationship with OpenAI, without compromising its financial strength, analysts said.

Representatives for JPMorgan Chase & Co., Goldman Sachs Group Inc., and Morgan Stanley, the lead banks on the transaction, declined to comment. Nvidia referred inquiries to its official offering filing.