Broadcom negotiates over $60 billion in AI chip financing

Aug 20, 2026

Broadcom is negotiating a massive off-balance-sheet debt structure of up to $100 billion, including over $60 billion in senior secured debt, to finance and lease custom AI chips to companies like Anthropic. While the deal aims to help AI startups scale infrastructure without heavy upfront capital, credit markets reacted negatively, sending Broadcom's credit default swap spread to a record 122 basis points. The move intensifies capital competition with Nvidia, which has reportedly lined up over $500 billion in third-party financing.

Broadcom debt financing structure

▪The proposed Broadcom financing structure includes an additional junior debt tranche of approximately $30 billion, bringing the total potential borrowing capacity to roughly $100 billion
▪Broadcom would provide partial guarantees on the senior-secured debt tranche, which is estimated at between $60 billion and $70 billion
▪Bank of America analyst Tom Curcuruto estimated that Broadcom's chip financing facility could expand to support up to $370 billion in senior debt by mid-2029
▪Broadcom is negotiating to raise over $60 billion in senior secured debt through off-balance-sheet special-purpose vehicles to finance AI chip purchases
▪The special-purpose vehicles would purchase custom AI chips, including those developed with Google, and lease them to AI companies like Anthropic to reduce upfront capital expenditures
▪Blackstone and Apollo Global Management are in discussions to participate in Broadcom's proposed $100 billion off-balance-sheet debt financing round

AI infrastructure capital competition

▪Goldman Sachs Research predicts that total debt issuance associated with artificial intelligence could reach just under $500 billion by 2026
▪Nvidia reportedly announced in August 2026 that it arranged over $500 billion in third-party financing with investment firms including Apollo, Blackstone, BlackRock, Brookfield, Goldman Sachs, and KKR
▪Broadcom, Apollo Global Management, and Blackstone previously established a $35 billion private credit arrangement in June 2026 to expand Anthropic's compute capacity

Credit default swap spike

▪Broadcom's credit default swap spread spiked to a record 122 basis points following reports of the off-balance-sheet debt negotiations
▪Bank of America analysts reported that Broadcom's bond spreads widened by 20 to 45 basis points relative to industry peers due to rising contingent liabilities

Broadcom AI revenue growth

▪Broadcom generated $10.8 billion in AI semiconductor revenue in its fiscal second quarter ended May 3, 2026, representing a 143% increase year-over-year
▪Broadcom projects that its total AI-chip revenue will exceed $100 billion in fiscal year 2027
▪Broadcom CEO Hock Tan projected that the company's AI semiconductor revenue would exceed $16 billion in the fiscal third quarter of 2026

Custom silicon supply agreements

▪The collaboration between Broadcom, Apollo, and Blackstone aims to deliver over 20 gigawatts of compute capacity to frontier AI laboratories by 2028
▪Broadcom develops custom silicon for Alphabet and Meta, and maintains supply agreements with Anthropic and OpenAI to help them reduce dependence on Nvidia