Shares of the cloud data company fell 2.7% in premarket trading after the firm announced a plan to issue 0% convertible notes. Snowflake will raise $3.5 billion through the offering of notes that mature in 2029 and 2031.

The company intends to use the proceeds to retire debt due in 2027 and increase capital for artificial intelligence initiatives and acquisitions. AI currently drives approximately 50% of Snowflake's recent growth acceleration, and its CoCo product has surpassed 9,100 accounts.