Broadcom (AVGO-US) is currently in talks to raise $70 billion to $80 billion in debt financing to support a chip financing initiative for artificial intelligence (AI) companies such as Anthropic, highlighting the rapidly expanding scale of capital required for AI infrastructure development.
CNBC reporter David Faber recently confirmed that this financing is expected to be structured in two tranches: senior debt and junior debt. The senior debt, which has priority in repayment, is estimated at around $45 billion, while the risk-bearing junior debt is approximately $35 billion. However, sources indicate that the final amounts may still be adjusted.
Bloomberg first reported the deal, noting that the total financing could reach as high as $100 billion. Investment firms including Blackstone Group (BX-US) and Apollo Global Management (APO-US) are in discussions to participate in this large-scale financing arrangement.
As AI models grow larger and computational workloads increase, chip manufacturers are seeking unprecedented levels of funding to help customers build data centers, purchase chips, and expand computing capacity. Financing has become an essential tool for chipmakers to secure major AI clients and ensure future orders.
In June this year, Broadcom announced a new AI platform, planning to deliver a total of 20 gigawatts (GW) of computing power to Anthropic and OpenAI. At that time, Blackstone and Apollo led the initial $35 billion financing round; the current negotiations could further expand the funding scale.
Broadcom’s financing strategy reflects how competition in the AI chip industry has expanded beyond product performance to include capital support. This week, Nvidia (NVDA-US) disclosed in a regulatory filing that it will provide up to $105 billion in funding to support OpenAI’s construction of a new data center in Ohio, USA.
Just one week prior, Nvidia also announced a collaboration with six major asset management firms to advance a $500 billion financing initiative, aiming to establish AI computing infrastructure as a new asset class.
As major tech companies race to invest in AI data centers, Broadcom’s successful completion of up to $80 billion in financing would significantly enhance its competitiveness in the AI chip and infrastructure markets. Broadcom’s stock rose over 1% on Friday.
FACT BOX
- Source: PR Times
- Category: Funding
- Organizations: Anthropic / OpenAI