Nvidia is moving to raise about $20 billion in debt funding.

CNBC reported on Sunday that the offering would be Nvidia's first corporate bond issuance since the artificial intelligence boom gathered pace.

Nvidia disclosed its funding plan in a filing submitted to the U.S. Securities and Exchange Commission (SEC) on the day, but did not specify the size. People familiar with the matter said the actual fundraising target is about $20 billion.

Earlier this year, Nvidia said it could raise up to $25 billion by issuing unsecured commercial paper.

The fundraising comes as major technology companies step up capital market activity amid expanding AI demand. Alphabet announced a stock-linked fundraising plan of $85 billion earlier this month and has secured more than $55 billion in new debt since November last year.

Super Micro last week unveiled a stock-linked fundraising plan of $7 billion to cover costs for purchasing hardware components. Amazon has also raised about $54 billion this year by issuing bonds in the United States and Europe, and last week announced an additional debt fundraising plan of about $10 billion in Canada.

Nvidia's debt has also increased from before. It currently has about $7.5 billion in long-term debt and about $1 billion in short-term debt.

Nvidia's previous corporate bond issuance took place in 2021. At the time, Nvidia raised $5 billion, including bonds maturing in 2031. Since then, the company has expanded significantly. Nvidia's fiscal 2022 revenue was about $27 billion, but its fiscal 2026 revenue rose to $216 billion.

The spread of generative AI underpins that growth. After OpenAI released ChatGPT in late 2022, AI model developers and hyperscalers focused on securing Nvidia's graphics processing units (GPUs), which led to Nvidia's rapid growth.

Nvidia also disclosed how it plans to use the funds. A company spokesperson said the proceeds will be used for general corporate purposes, including repayment and refinancing of existing debt. An analysis says the aim is more to increase financial flexibility than to simply stockpile cash.

Nvidia has also recently expanded its shareholder returns aggressively. The company raised its dividend in May to 25 cents per share from 1 cent per share and announced a $80 billion share buyback plan.

Free cash flow in the latest quarter rose to $49 billion from $35 billion a year earlier.

Nvidia reaffirmed in its recent earnings release that it plans to return about 50 percent of free cash flow to shareholders this year. As a result, the bond sale is seen as fundraising carried out as strong cash generation, increased shareholder returns and management of existing debt proceed at the same time.

Markets view Nvidia's choice of balance between expanding AI investment and its financial strategy as a key point to watch going forward.