Broadcom is in talks to raise more than $60 billion in debt to finance AI chips for Anthropic and similar companies, potentially scaling total financing up to $100 billion. This follows a recent $35 billion initiative that expanded Anthropic's computing capacity through a partnership involving Apollo and Blackstone.
- Broadcom plans a two-part debt raise totaling $60B to $100B for AI chip financing.
- Apollo and Blackstone are key partners in the AI XPV financing structure.
- The partnership targets over 20 gigawatts of AI computing capacity by 2028.
What happened
Broadcom is currently negotiating with lenders to secure over $60 billion in debt aimed at funding AI chip production for Anthropic and other AI enterprises. This new funding round could reach a total of $100 billion depending on final terms. The structure involves a junior tranche of about $30 billion and a senior-secured tranche ranging between $60 billion and $70 billion, with Broadcom backing part of the senior debt.
This debt will be issued through a special-purpose vehicle, which isolates the obligations from Broadcom's main balance sheet and allows investors claims to the underlying assets. Broadcom, in partnership with investment firms Apollo Global Management and Blackstone, previously launched the AI XPV partnership in June, raising $35 billion to boost Anthropic's compute power using Broadcom’s custom chips and networking gear.
Why it matters
The proposed scale of financing underlines the rapidly growing demand for AI computational infrastructure and chips, projected to reach hundreds of billions of dollars by 2028. The goal is to finance over 20 gigawatts of AI computing, which would significantly increase Anthropic's and other labs' capacity to train and run advanced AI models. This scale rivals the power output of multiple nuclear plants, highlighting the resource intensity of large AI operations.
Broadcom’s efforts support a broader industry trend of deploying custom silicon to reduce reliance on Nvidia chips, a dominant player in the AI hardware market. With a strong background in chip design for major tech companies like Alphabet, Meta, and Apple, Broadcom aims to capture growing AI chip demand, with CEO projections that AI chip sales will exceed $100 billion next year.
What to watch next
Market participants should monitor the progression of Broadcom’s debt financing talks as terms could evolve, and the timing may stagger the capital deployment. The successful completion of this round will determine the pace at which Anthropic and allied AI firms can scale their computing power amid rising competition in the AI chip space.
Additionally, developments in Anthropic’s other financing initiatives, including a $1.3 billion loan for a Texas data center and a revolving credit facility ahead of its anticipated IPO, will be critical. Anthropic’s IPO, expected soon, is projected to be one of the largest in the AI sector, potentially surpassing SpaceX’s $75 billion capital raise benchmark.