Selling Chips, Leasing, Providing Residual Value Support: Broadcom (AVGO.US) Teams Up with Wall Street's Four Giants to Raise $63 Billion to "Inject Funds" for Anthropic's Chip Procurement

According to Zhihui Finance APP, Broadcom (AVGO.US), a leader in AI ASICs, core chips for Ethernet switches, and data center optical interconnect chips, together with four Wall Street financial giants—Bank of America, Blackstone, Citigroup, and Morgan Stanley—have jointly arranged a financing deal of approximately $63 billion. This provides major financial support for Anthropic, the world’s leading AI large model developer and AI application leader, to purchase AI chips.

According to a joint statement from the participating institutions on Monday, this deal will be implemented through a newly established special purpose vehicle (SPV). The financial institutions will provide committed financing, which will be used to purchase Broadcom chips and lease them to Anthropic. Broadcom is providing partial security for the financing through a “residual value support” arrangement.

As previously reported earlier this month, the Wall Street financing alliance led by Broadcom had begun raising an additional $60 billion in AI chip financing to support Anthropic and other leading AI application companies, with Bank of America, Citigroup, and Morgan Stanley among the participating banks.

This financing deal has taken shape over several weeks and has been closely watched by professionals on Wall Street and in Silicon Valley. Amid growing opposition to data centers and concerns about future market demand, stakeholders hope to confirm whether investors are still willing to support AI infrastructure construction. Broadcom aims to sell more chips and other data center equipment, challenging Nvidia; meanwhile, AI companies like Anthropic require ever-increasing computing power.

This deal further expands the scale of debt financing used for AI infrastructure construction, with related financings already reaching several hundred billion or even close to the trillion-dollar super threshold. While a significant portion of the funds flows to data centers, financing deals for chip and server procurement are also growing actively.

In August this year, Nvidia also announced partnerships with six financial industry giants, including Blackstone, planning to mobilize over $500 billion for the AI sector. This includes helping clients raise funds for the purchase of Nvidia chips.

$63 Billion Chip Financing Lands, Key Support Added to the AI “Funding Relay”

The core significance of Broadcom’s $63 billion transaction lies in providing Anthropic’s compute power procurement with a more concrete financing mechanism. Bank of America, Blackstone, Citigroup, and Morgan Stanley are providing financing commitments. The newly established special purpose vehicle (SPV) will purchase core AI infrastructure equipment related to Broadcom’s AI accelerators and network infrastructure, then lease them to Anthropic; Broadcom will provide partial residual value support. The joint announcement clarified that this is part of the previously announced strategic compute agreement, with deliveries expected to start in 2027. Thus, the direct benefit lies in enhancing the executability of existing procurement plans, providing vital funding for chip orders to translate into delivery and revenue.

This deal emerges against a backdrop of continued tightness in the credit market. Reporting from October 22 indicates that the secondary market yield on CoreWeave bonds maturing in 2031 reached about 15.76%; on October 26, its five-year Credit Default Swap (CDS) spread was around 1,148 basis points, implying about a 62% five-year cumulative default probability under a 40% recovery assumption (including risk premium, not an actual default forecast). During the same period, five-year CDS spreads for Meta, Alphabet, and Microsoft were about 121, 83, and 55 basis points, higher than the 98, 73, and 52 basis points observed on September 25. The risk compensation required by the market for corporate credit bonds has generally risen, but the pressure varies significantly among different firms.

Compared with the at least $210 billion financing deals involving Goldman Sachs, the sources of funds are becoming clearer: Meta is advancing equity financing, SpaceX uses equipment financing and leasing, Anthropic is moving toward an initial public offering (IPO), and Broadcom brings in bank financing and private credit to support equipment procurement. These arrangements collectively address the market question: “How can AI construction funding continue?” Capital is still willing to support some capacity expansion, but is increasingly focused on identifiable equipment assets, contract cash flows, and credit support.

These latest developments in the AI compute power industry chain send a strong positive signal of continuous upgrades in procurement funding to the semiconductor sector, which recently experienced a major sell-off. However, this does not mean the cost pressure of AI sector financing has fully eased.

From Selling Chips to Supporting Financing: How Broadcom Turns Compute Demand into Complete Deliverable Orders

The underlying mechanism of Broadcom’s latest arrangement is to separately organize equipment procurement, usage, and financing. The SPV raises funds to purchase equipment, Anthropic obtains usage rights through leasing, and lease payments provide cash flow for debt repayment. Bank of America, Citigroup, and Morgan Stanley are arranging first-lien financing, and Blackstone is the sole provider of committed second-lien financing. Different tranches allow funds with varying risk tolerance to participate in the same deal.

Broadcom’s residual value support is the key credit enhancement arrangement. The announcement disclosed that the supported amount matches the scale of the first-lien financing; economically, this means the supplier bears the risk of insufficient equipment value within an agreed range, enhancing recovery assurance for part of the financing. This does not equate to Broadcom giving unconditional guarantees for all of Anthropic’s debt but does mean that as Broadcom strives for chip sales, it also bears some asset value risk. Consequently, the supplier’s competitiveness is further extended into product, delivery, and financing organization capability.

From the perspective of the AI compute power industry chain, this deal directly supports the realization of sales for Broadcom AI accelerators and network equipment and may, along with actual deliveries, drive supporting demand for memory, advanced packaging, and interconnects. For the global semiconductor industry, it reinforces the chain of “financing supports procurement, procurement drives delivery, and delivery generates revenue.” For Broadcom’s fundamentals and the growth outlook for AI ASICs, it helps expand the custom accelerated computing ecosystem and lays a strong foundation for intense competition with Nvidia’s AI GPU clusters.

As the global AI agent boom triggered by Muse dramatically expands the complexity of tasks and overall demand for AI computing, specialized systems like TPU/AI ASICs are expected to sharply reduce unit inference costs. Institutions such as Morgan Stanley and Wedbush Securities, which remain bullish on the AI compute power supply chain, believe that the nearly limitless computing frontier of the AI inference era and growing compute power demand surrounding AI agents will allow AI ASICs to become a key part of a multi-trillion-dollar compute ecosystem—without destroying demand for GPUs. This further strengthens the investment logic that the “AI semiconductor super-cycle is not a single GPU cycle, but an exponential increase across the entire data center silicon content cycle.”