Broadcom Inc. is discussing an artificial intelligence chip financing package with major financial institutions that could ultimately total up to $100 billion.
- Broadcom is negotiating a massive debt arrangement featuring a senior secured tranche of $60 billion to $70 billion, plus a potential $30 billion junior tranche.
- Major private investment firms, including Blackstone Inc. and Apollo Global Management, are in talks to participate in the financing.
- The proceeds will secure custom AI chips and infrastructure for firms like Anthropic PBC, helping Broadcom challenge Nvidia Corp.
Broadcom Inc. (AVGO) is negotiating with a group of private lenders to secure more than $60 billion in debt financing, as part of an ambitious financing arrangement to acquire custom artificial intelligence chips and the underlying hardware.
The proposed package includes a senior-secured tranche ranging from $60 billion to $70 billion, along with a junior debt tranche of roughly $30 billion, Bloomberg reported, citing people familiar with the matter. Broadcom is set to backstop a portion of the senior debt, which could potentially drive the deal’s overall valuation up to $100 billion.
AVGO share price gained 0.4% on Thursday and extended gains after-hours.
Deepening Wall Street Ties
The debt structure is expected to be issued through a special-purpose vehicle. Financial giants Blackstone Inc. and Apollo Global Management are actively negotiating to participate, Bloomberg reported. The move builds on a partnership the trio established in June to fund computing infrastructure.
The previous deal under their AI XPV vehicle secured $35 billion in financing, where investors funded custom chips leased directly to Anthropic PBC. Broadcom’s guarantees on that earlier transaction helped the senior debt earn investment-grade credit ratings, keeping interest rates low.
Representatives for Broadcom, Anthropic, Apollo, and Blackstone all declined to comment on the ongoing talks, Bloomberg noted.
Escalating Compute Demand
The capital raised will help firms such as Anthropic, creator of the Claude AI system, secure critical computing resources as technology companies scramble to build out capacity. Broadcom is leveraging these deals to expand sales of its data center equipment and challenge Nvidia Corp.’s dominance in the sector.
The long-term plans for the AI XPV vehicle involve funding more than 20 gigawatts of computing power—a massive undertaking that will require hundreds of billions of dollars. The scale reflects an industry-wide surge in borrowing for AI projects, following recent moves like Nvidia’s (NVDA) partnership with BlackRock Inc. and Goldman Sachs Group Inc. to support over $500 billion in infrastructure funding.
The chipmaker, which also produces custom processors for OpenAI and maintains a key partnership with Apple Inc., expects its annual AI chip revenue to top $100 billion next year.
AVGO Stock: Retail View
Retail sentiment on Stocktwits was ‘extremely bullish’ with ‘high’ message volumes.
One user highlighted strong demand for chips as the driver of the fundraise.
View this Stocktwits post
AVGO stock has gained 4.4% year-to-date.