Broadcom, big banks line up $63 billion in AI financing for Anthropic

Broadcom said it has raised $63 billion in financing for AI infrastructure for Anthropic. The financing will be used to buy Broadcom XPU AI accelerators and includes Bank of America, Blackstone, Citi and Morgan Stanley.

The deliveries will start next year. Broadcom outlined a few of the moving parts.

“The transaction will be executed through a newly formed special purpose vehicle ("SPV") with committed financing from the Lead Financial Partners to support the purchase of Broadcom XPU AI accelerators and networking solutions to be leased to Anthropic. The first lien portion of the financing is being arranged by Bank of America, Citi and Morgan Stanley, with Blackstone as the sole provider of the committed portion of the second lien financing. Broadcom is providing residual value support to the SPV for the amount equivalent to the first lien portion of the financing. This transaction highlights the deep collaboration across the AI technology and financial ecosystems.”

But the real story is from The Wall Street Journal, which reported how hard it was to close the deal.

• Anthropic inks deal with Google, Broadcom for TPU capacity
• Anthropic's IPO filing: You can't say you weren't warned

In addition, Broadcom's press release includes the following:

• A special purpose vehicle, which indicates off balance sheet.
• Liens.
• Broadcom had to guarantee a big chunk of the financing via residual value support (RSV).

A shell company essentially is borrowing $63 billion to buy Google TPUs made by Broadcom for Anthropic. The shell company borrowed the money so Broadcom isn’t on the hook unless Anthropic can’t make the payments. Banks will eventually float the bonds to the broader market once the chips are delivered.

Also see: Nvidia makes case AI factories, its stack are enduring capital assets

It may work out. Or it may not. The Broadcom deal will either be a great proof of concept for more AI funding or one ugly debt baby.

Here's a look at the graphics.