As the growth of artificial intelligence has fueled the pursuit of low-cost financing, global companies are issuing convertible bonds at the fastest pace in 24 years. According to data compiled by Bank of America Global Research, Alibaba, Lumentum Holdings, and Supermicro are all using convertible bonds to raise funds for AI-related investments, driving 2025 fundraising to approximately $166.5 billion. The data shows this is the highest level since 2001 and only slightly below the all-time high. Convertible bonds can be converted into company stock under certain conditions, offering companies lower interest costs at the cost of diluting shareholders’ equity if the conversion rights are exercised. This has traditionally made them highly attractive to companies with strong growth potential. According to Nikolov of Fisch, AI-related companies across the semiconductor, infrastructure, software, and utilities sectors collectively contributed about 40% of the returns on the benchmark convertible bond index last year. Damon Carter, head of convertible bonds at Daiwa Capital Markets Europe, said: “With healthy stock markets and stabilizing interest rates, 2026 will offer more opportunities, particularly in Asia, where convertible bonds are increasingly becoming a mainstream financing tool.”