Broadcom (AVGO) Nears $70B Debt Financing Deal, Sources Say

Broadcom Inc. (NASDAQ:AVGO) is reportedly negotiating a $70 billion to $80 billion debt financing deal to support AI companies such as Anthropic. The senior tranche of this financing is expected to be around $45 billion, while the junior tranche is anticipated to be approximately $35 billion, though these figures may fluctuate. Bloomberg first disclosed that the total deal could potentially reach $100 billion, with both Blackstone and Apollo Global Management participating in talks.

This expansion of the partnership initiated in June between Broadcom, Apollo, and Blackstone, which committed $35 billion, aims to advance Anthropic's computing infrastructure utilizing Broadcom's custom chips. The financing strengthens Broadcom's position as essential infrastructure for AI labs, surpassed solely by Nvidia, by providing custom chips to industry giants like Alphabet, Meta, Anthropic, and OpenAI.

This financing structure enables Broadcom to participate in AI infrastructure development without incurring full debt on its balance sheet. It achieves this by raising debt through a special-purpose vehicle and leasing the chips back to customers like Anthropic, rather than borrowing directly. The scale of this deal indicates robust demand, representing sustained growth for Broadcom's AI customers rather than a short-term expenditure.

However, this financing bears risk if any of Broadcom's customers encounter payment difficulties, despite the SPV structure. The numbers surrounding this deal remain fluid as negotiations progress, with potential figures ranging from over $60 billion to as much as $100 billion. The exposure associated with such large, unsecured deals is a concern, especially if credit markets tighten before the financing concludes.

This financing also positions Broadcom Inc. as a central financier, not merely a chipmaker, in the AI buildout.