Broadcom is currently in talks with lenders to secure a significant amount of debt, ranging from $70 billion to $80 billion, to support a chip financing arrangement that will benefit artificial intelligence companies, including Anthropic. According to CNBC, lenders are looking to provide a senior tranche of around $45 billion and a junior tranche of approximately $35 billion, although these figures are subject to change.
In a separate report by Bloomberg, it was suggested that the deal could involve a junior tranche of about $30 billion and a senior-secured tranche ranging from $60 billion to $70 billion. This could potentially result in a total raise of up to $100 billion. The financing will be structured through a special-purpose vehicle and will follow a similar model to a previous $35 billion deal.
Blackstone and Apollo Global Management are said to be among the investors in discussions to participate in the financing. While Blackstone declined to comment on the matter, neither Broadcom nor Apollo responded to Reuters’ requests for input.
This funding initiative will build upon a partnership established in June between Broadcom, Apollo, and Blackstone, where the three companies pledged $35 billion to enhance Anthropic’s computing infrastructure using Broadcom’s custom chips and networking solutions. The initial commitment aimed to increase computing capacity by one gigawatt, with a larger goal of delivering over 20 gigawatts of compute to leading AI labs by 2028.
Broadcom is known for designing custom chips for major companies such as Alphabet, Meta, Anthropic, and OpenAI. The company’s role in providing alternative AI chips helps reduce the industry’s reliance on Nvidia, a prominent supplier in the field.
Following these developments, Broadcom’s stock saw a modest increase of just over 1% on Friday, indicating positive market sentiment towards the company’s future endeavors.
