Broadcom Negotiates Up to $100 Billion Debt Deal for AI Chip Fleet

Broadcom is negotiating to raise between $60 billion and $100 billion in debt to fund a massive AI chip financing vehicle. The move signals a shift in how the industry scales infrastructure, moving away from direct capital expenditure toward massive credit-backed arrangements.

According to reports from Bloomberg and CNBC, the financing is designed to purchase custom AI hardware for Anthropic PBC and other AI firms. Under the proposed structure, major investment firms including Apollo Global Management and Blackstone will finance the chip purchases, which are then leased back to the AI companies. This allows developers to deploy immense computing power without the immediate burden of full upfront costs, while ensuring Broadcom remains the primary hardware provider for these firms.

A Blueprint for AI Scaling

This strategy expands a model Broadcom has already tested. The company previously backstopped a $35 billion deal known as "Project Big Sky" to finance custom AI chips specifically for Anthropic. By acting as the intermediary and guarantor, Broadcom creates a financial bridge between the capital markets and the technical requirements of generative AI firms.

The scale of these ambitions is staggering. Bank of America analyst Tom Curcuruto estimated that if the financing vehicle scales to a 20 gigawatt capacity, it could potentially carry as much as $370 billion in senior debt by mid-2029. This projection highlights the sheer volume of capital required to maintain the current pace of AI model training and deployment.

The Rise of Phantom Liabilities

While the arrangement accelerates hardware deployment, it has triggered alarms among credit markets. The Business Times reports that bond traders are increasingly concerned about "phantom liabilities"—debts that may not appear directly on a company's primary balance sheet but create systemic risk if the underlying AI ventures fail to generate expected returns.

This anxiety is already manifesting in the markets. A spike in Broadcom's Credit Default Swaps (CDS) suggests that investors are weighing the risk of these massive credit backstops against the company's overall financial health. If the AI market cools or the lease-back models prove unsustainable, the resulting credit shock could ripple through the broader chip and hyperscaler markets.

What to Watch

Market observers are now monitoring whether other chip designers will adopt similar financing vehicles to compete for the limited pool of AI talent and data. The final terms of the current deal, including the exact debt ceiling and the specific risk-sharing agreements between Broadcom, Apollo, and Blackstone, remain the key variables. As the industry moves toward a $370 billion debt horizon, the stability of these credit-backed vehicles will likely become a primary metric for the health of the AI boom.