Why AI Spending Revived Convertible Bonds After a Decade Dormant

US convertible bond issuance hit $57 billion in 2026—the highest on record—as companies funding AI infrastructure discovered convertibles offer cheaper financing than straight debt. Post-2022 interest rate increases made the math work: convertibles pay lower coupons because bondholders gain equity upside, a trade-off that appeals to CFOs betting on cloud and datacenter growth. The market hasn't seen this volume since the pandemic.