Broadcom Guarantees Anthropic's $35 Billion Chip Order, Pioneering a New AI Financing Model
Claire Weston
Broadcom, Apollo and Blackstone launched the AI XPV platform; its first $35 billion deal finances Anthropic's compute buildout — with Broadcom pledging its own credit to guarantee chip orders, binding chipmaker, private credit and AI demand into a single structure.
How does this deal actually work?
The vehicle is an SPV — a shell company set up for this single transaction — run by Apollo's Atlas SP Partners. The SPV buys chips, leases them to Anthropic, and uses rent payments to service the debt.
Debt comes in three layers: $600 million in A1 notes sold to banks at Treasuries + 100 basis points; $24 billion in A2 notes sold to institutional investors at 5.75%; and $4.5 billion in subordinated notes — no Broadcom guarantee — yielding 8.5%.
This means → the senior layers get a low rate only because of Broadcom's "make-whole" clause: if Anthropic defaults and chip disposal proceeds fall short, Broadcom covers the gap out of its own pocket.
In plain terms = Broadcom is using its creditworthiness as collateral to lock in a massive chip order. The unguaranteed junior debt costs roughly twice as much — that spread is the market's price tag on the guarantee itself.
Can Broadcom's balance sheet handle this?
S&P Global Ratings flagged the guarantee as having a "mildly negative" credit impact on Broadcom.
As of May 3, Broadcom carried $65 billion in debt against just $19.6 billion in cash — far less financial headroom than Nvidia.
One institutional bondholder said the biggest question is how Broadcom books the obligation: it is not a traditional loan, but it still counts as a liability on the balance sheet.
A built-in safeguard: the payout triggers only if Anthropic defaults and chip residual value falls below guaranteed levels. Notes amortize fully over five years, so Broadcom's exposure theoretically declines to zero over time.
Why did Hock Tan change his mind?
A person who spoke with Broadcom executives said CEO Hock E. Tan was still cautious about balance-sheet guarantees as recently as March — then reversed course.
This reflects a competitive reality: Nvidia is already using similar vendor-financing tools to accelerate chip sales. Broadcom risked falling behind if it didn't follow.
Broadcom turned to Morgan Stanley to design a structure that pushes chip sales while capping on-balance-sheet debt growth. Tan called the partnership a "once-in-a-generation opportunity."
This means → the ambition extends well beyond one deal: by 2028, Broadcom aims to finance over 20 gigawatts of compute for frontier AI labs through the XPV platform — if fully realized, that implies chip procurement on the order of $700 billion.
How tangled are the relationships here?
Broadcom co-manufactures TPUs — tensor processing units, Google's custom AI chips — for Google, Anthropic's main rival. And yet Anthropic is the one buying those chips through this SPV.
Google parent Alphabet holds roughly 14% of Anthropic — the buyer's largest shareholder and the seller's manufacturing partner are the same company.
Morgan Stanley wears multiple hats in the deal: Broadcom's financial adviser, lead arranger, and lender to participating investors.
In plain terms = every party is simultaneously a partner and a potential conflict-of-interest counterparty.
What is Anthropic's own position?
Some bidding investors could not access Anthropic's financials before the company formally filed for an IPO.
This is the first time bond investors can bet on Anthropic — a company that is not yet profitable and has never issued corporate debt.
The deal uses a delayed-draw structure — funds can be drawn in tranches — which lowers the effective yield and led some investors to walk away.
This reflects Anthropic's push to build its own compute supply and reduce reliance on Google and Amazon cloud services. Separately, Anthropic has reportedly arranged for Google to backstop leases at five data-center sites.
Where will AI infrastructure money come from?
Morgan Stanley projects U.S. AI capital-markets financing will reach $400 billion, growing to over $1 trillion by 2028, to match roughly $1.8 trillion in capital expenditure over the next two years.
Traditional banks are already straining to absorb large-scale AI debt; private credit is stepping in as a major alternative channel.
Recent precedents: Meta completed a $27.3 billion SPV deal around its Louisiana Hyperion data center; Amazon issued roughly C$14 billion (≈$10 billion) in Canada — the largest single bond sale in Canadian-dollar market history.
This means → Broadcom's deal is not an outlier. It is part of an industry-wide shift in AI infrastructure financing — from bank lending toward structured private credit. Whether Broadcom can replicate this model without damaging its credit rating is the key test of Hock Tan's gamble.
Content is for reference only, not financial advice.