Broadcom Negotiates $100 Billion Debt Deal for AI Infrastructure

Broadcom Inc. is negotiating a massive debt financing package, potentially totaling $100 billion, to fund AI chips and computing infrastructure for companies such as Anthropic PBC. The proposed structure utilizes a special-purpose vehicle to purchase Broadcom hardware and lease it to end tenants, lowering the financing barrier for large-scale AI labs. The deal would likely consist of a senior-secured tranche between $60 billion and $70 billion, which Broadcom would partially guarantee, and a junior debt tranche of approximately $30 billion.

Private credit firms Blackstone Inc. and Apollo Global Management are in talks to participate, building on a June partnership that established a $35 billion agreement to expand Anthropic's computing capacity. This initiative is part of a broader effort to enable more than 20 gigawatts of compute power for AI labs by 2028 and allows Broadcom to increase its market share against competitor Nvidia Corp.

The scale of the borrowing has triggered a spike in Broadcom's credit default swaps and bond yields, reflecting investor concern over the debt levels required to sustain AI growth. Analysts have warned of phantom leverage within the AI ecosystem, where chipmakers lend their balance sheets to clients to boost purchasing power through off-balance sheet arrangements. Similar large-scale initiatives are being pursued by Nvidia, which is reportedly planning a $500 billion infrastructure initiative with Wall Street firms and $105 billion for an OpenAI data center.