--- title: "Convertible: what it means · The AI Compute Race · DRYBURGH" source: https://dryburgh.com/vol1/glossary/convertible description: "Convertible: A bond or preferred share that its holder can turn into the issuer's stock on set terms." --- # Convertible What does “Convertible” mean? ConvertibleA bond or preferred share that its holder can turn into the issuer’s stock on set terms. NVIDIA bought convertible preferred at Lumentum and Marvell, and convertible bonds at MediaTek. *Chapters 5, 10.* From *The AI Compute Race*. [Read the book](https://dryburgh.com/vol1#buy) ## Where the book uses it - [Chapter 5 — The Island in Every Machine](https://dryburgh.com/vol1/notes/chapter-5)Why every accelerator runs through Taiwan: the foundry, the packaging and the memory that are booked years ahead, and what that does to anyone arriving late with cash. - [Chapter 10 — The Lender’s Decision](https://dryburgh.com/vol1/notes/chapter-10)Who is lending the money and who bears the loss: the bonds, leases and guarantees behind the largest campuses, and how the paper reaches ordinary retirement accounts. ## Sources that use it - CoreWeave, Inc., “CoreWeave Prices Upsized $3.7 Billion Convertible Senior Notes Offering,” press release, 18 September 2026 (a private offering of “$3.7 billion aggregate principal amount of its 2.875% convertible senior notes due 2033”, “upsized from the previously announced offering of $3.0 billion”, to settle on 22 September 2026; guaranteed by the subsidiaries that guarantee its existing notes, among them its “1.75% convertible senior notes due 2031 and 1.75% convertible senior notes due 2032”; the release read whole in a capture of 30 September 2026). [In the Sources](https://dryburgh.com/vol1/sources/company#coreweave-convert-sep26) - Alphabet Inc., “Alphabet Announces Upsize and Pricing of $84.75 Billion Equity Capital Raise to Expand AI Infrastructure and Compute,” release dated 2 June 2026, filed as a free writing prospectus 3 June 2026 (the stock offering upsized to $18 billion from $15 billion and the depositary share offerings to $16.75 billion from $15 billion — 6.25 percent Series A and Series B Mandatory Convertible Preferred Stock, converting around 15 May 2029; with the $40 billion ATM program and the $10 billion placement “a total equity raise of $84.75 billion”; Goldman Sachs, J.P. Morgan and Morgan Stanley lead book-runners; closings 4 and 5 June 2026). [In the Sources](https://dryburgh.com/vol1/sources/filing#alphabet-equity-pricing-jun26) - Broadcom Inc., Form 10-Q for the fiscal quarter ended 2 August 2026, filed 10 September 2026, accession 0001730168-26-000080 (purchase commitments of $126.8 billion, $126,821 million in the commitments table, the supplier-level split not disclosed; remaining performance obligations of approximately $179.2 billion; “These commitments include obligations under a long-term contract for custom AI accelerators entered in the fiscal quarter ended May 3, 2026”; the Convertible Notes paragraph, naming no customer: “our customer may, under certain circumstances and if needed, issue to us convertible promissory notes up to an aggregate principal amount of $42 billion”, to be used “solely for the customer’s obligations under the lease agreements”, and as of 2 August 2026 “no notes have been issued to us”; the filing’s HTML sets the figure as “$ 42 billion” in separate spans; the Financial Guarantee paragraph, naming no partner: “our Backstop liability will be equal to any difference between 85% of the outstanding amounts owed on the lease Backstop and the value of the AI racks received upon sale of the assets at that time”, the remedies including “reselling the AI racks back to the seller at a fixed price under certain conditions”, and “No amounts have been paid under the Backstop.”; among the risk factors: “During the three fiscal quarters ended August 2, 2026, approximately 95% of the wafers manufactured by our CMs were produced by Taiwan Semiconductor Manufacturing Company Limited” and “We believe our wafer requirements represent a meaningful portion of TSMC’s total production capacity.”). [In the Sources](https://dryburgh.com/vol1/sources/filing#avgo-10q-aug26) - CoreWeave, Form 10-Q for the quarter ended 30 June 2026, filed with the US Securities and Exchange Commission (Note 10—Debt: the DDTL 4.0 Facility of March 2026 at daily compounded SOFR plus 2.25 percent or the alternative base rate plus 1.25, with “debt-sizing limitations tied to the purchase price of eligible assets” based upon “the depreciable cost of computing equipment”; the DDTL 5.0 Facility of May 2026 at SOFR plus 4.50 percent, “constrained by the purchase price of assets” based upon “the depreciable cost of graphics processing unit servers”; the DDTL 5.5 Facility of August 2026 as a subsequent event at Term SOFR plus 5.5 percent; the MD&A’s statement that the $13.6 billion outstanding under the DDTL facilities at 30 June 2026 is “collateralized with the assets underlying the contributed contracts and the pledged contractual cash flows, generally from investment grade counterparties” — no customer-credit-tiered margin anywhere in the filing; Note 10’s issuances in the six months to 30 June 2026 at stated rates — 2031 9.75% Senior Notes, April 2026, $2,750 million; 2032 9.625% Senior Notes, June 2026, $1,250 million; 2032 EUR Senior Notes at 8.50 percent, €2,000 million; 2032 Convertible Senior Notes at 1.75 percent, $4,000 million — and the debt table’s “Effective Interest Rates” of 10 percent on each of the 2030, 2031 9.00%, 2031 9.75% and 2032 9.625% Senior Notes, with total recourse debt, net, of $31,405 million against $20,726 million at 31 December 2025; the same table’s effective rate of 9 percent on the 2032 EUR Senior Notes; the debt table’s effective interest rates on the delayed-draw facilities, 15 percent on the DDTL 1.0 Facility of 2023 for up to $2.3 billion, 11 on DDTL 2.0, 9 on DDTL 2.1, 3.0 and 5.0, and 7 on the non-recourse DDTL 4.0) [In the Sources](https://dryburgh.com/vol1/sources/filing#coreweave-10q-q2-26) - CoreWeave, Inc., Form 8-K, 17 September 2026 (Item 8.01: an Equity Distribution Agreement of 17 September 2026 under which “up to 35,000,000 shares of Common Stock may be offered and sold from time to time by the Company through or to the Sales Agents” or through forward sellers under collared forward sale agreements; no shares to be sold “until at least 30 days after the date of the purchase agreement for the Convertible Notes Offering”; the uses of proceeds “may include, without limitation, repayment of indebtedness, payment of operating expenses, capital expenditures, investments in the Company’s subsidiaries, acquisitions, and support of its objective of migrating its enterprise credit profile toward investment grade”; read on EDGAR by the close sweep on 5 October 2026). [In the Sources](https://dryburgh.com/vol1/sources/filing#coreweave-8k-atm-sep26) And 5 more: [search the Sources](https://dryburgh.com/vol1/sources). ## Related terms - [10-K, 10-Q](https://dryburgh.com/vol1/glossary/10-k-10-q) - [Advanced packaging](https://dryburgh.com/vol1/glossary/advanced-packaging) - [AI factory](https://dryburgh.com/vol1/glossary/ai-factory) - [Backstop](https://dryburgh.com/vol1/glossary/backstop) - [Basis point](https://dryburgh.com/vol1/glossary/basis-point) - [Beignet](https://dryburgh.com/vol1/glossary/beignet) - [Booked, allocated, rationed](https://dryburgh.com/vol1/glossary/booked-allocated-rationed) - [Bridge loan](https://dryburgh.com/vol1/glossary/bridge-loan) - [CHIPS Act](https://dryburgh.com/vol1/glossary/chips-act) - [Coupon](https://dryburgh.com/vol1/glossary/coupon) - [Covenant](https://dryburgh.com/vol1/glossary/covenant) - [CoWoS](https://dryburgh.com/vol1/glossary/cowos) From the glossary of The AI Compute Race. - [Campuses](https://dryburgh.com/vol1/ledger) - [Tests](https://dryburgh.com/vol1/tests) - [Scorecard](https://dryburgh.com/vol1/scorecard) - [Data](https://dryburgh.com/vol1/data/releases) - [Chapter by chapter](https://dryburgh.com/vol1/companion) - [The record at a glance](https://dryburgh.com/vol1/observatory) - [The machine](https://dryburgh.com/vol1/machine) - [One campus, four futures](https://dryburgh.com/vol1/hyperion) - [Glossary](https://dryburgh.com/vol1/glossary) - [People](https://dryburgh.com/vol1/people) - [Sources](https://dryburgh.com/vol1/sources) - [Notes](https://dryburgh.com/vol1/notes) - [Where the book was wrong](https://dryburgh.com/vol1/corrections) - [Where its sources were wrong](https://dryburgh.com/corrections?book=vol1) - [The Paper](https://dryburgh.com/vol1/paper) - [Consent](https://dryburgh.com/vol1/consent) - [Who builds and pays](https://dryburgh.com/vol1/parties) *The AI Compute Race: Five Races, One Machine* is a book by Lee S. Dryburgh, the first volume of THE COMPUTE ECONOMY, published by Dryburgh, an imprint of Contestra OÜ, Tallinn, Estonia; its record closes on 8 November 2026. [About the book](https://dryburgh.com/vol1)[Tell me when it is out](https://dryburgh.com/vol1#notify)