US convertible bond sales have reached their highest annual total on record, according to data compiled by Bloomberg, as companies look to fund heavy artificial intelligence-related spending. Companies with US listings have raised $131 billion from the sales of bonds that potentially convert into stock under certain conditions, with the $25 billion gathered in August propelling the annual total above the previous record from two years ago.

The activity has drawn in upstart AI cloud companies such as Nebius Group NV, the Amsterdam-based firm that raised $5.75 billion across two issues announced last month. But investment-grade firms have also piled in, with Alphabet Inc. producing the year’s biggest convertible securities as part of its $85 billion fundraise. About 44% of this year’s convertible bond sales have come from AI-related companies, Spencer Rogers, a Goldman Sachs Group Inc. strategist, wrote in a report earlier this week.

Dominating this year’s deal mix are hefty equity-like mandatory convertible preferred stock offerings such as Alphabet’s, which accounted for $20.5 billion in a two-part deal in June, and Oracle Corp.’s $5 billion offering in February. The demand for convertible securities is helping companies capture favorable terms. Many such bonds have relatively low coupons and high so-called conversion premiums.